US dollar gained on Tuesday against its major counterpart currencies despite the news that Swiss National Bank decided to set a floor on the euro exchange rate against the Swiss franc. The 17-nations shares currency took heavy beating and dropped below the level of $1.40 in reaction to which greenback benefited the most. The euro fell 0.6 percent against the US dollar on Tuesday whereas touched its intraday high of 1.4218 against the US dollar. The euro however gained versus the Swiss franc to 1.20 on Tuesday as compared to 1.12 on Monday’s European trading session.

One of the major reasons for the appreciation of single currency against the Swiss franc was the following statement issued by Swiss Central Bank:

“The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development, with immediate effect, it [the SNB] will no longer tolerate a EUR/CHF exchange rate below the minimum rate of CHF 1.20. The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities.”

The dollar index DXY which measures the greenback’s movement against its major rival currencies surged 0.9 percent to 76.993 on Tuesday. The US dollar surged 9.7 percent against the Swiss franc to 86.23 which also happens to be its biggest gain in single day since 1991.

The US dollar also soared 1 percent against the Japanese Yen to 77.69 on Tuesday. Among other currency the British Pound also fell 1 percent to 1.5938 against the US dollar while the Australian dollar dropped 0.23 percent to 1.0490 versus the greenback despite the decision of Australian Central Bank to keep its interest rates at record lows.

List of major events that could affect the trading of the pair EUR/USD for the week ending September 9^th, 2011 are as follows:-

Yesterday on Monday, markets in United States remained closed in observance of the Labor Day. In euro zone, official data on retail sales was released along with reports on service sector growth and investor confidence.

Today on Tuesday September 6^th, 2011, Institute of Supply Management will publish its report on service sector activity while in euro zone revise data on gross domestic product for second quarter will be released. Moreover, Germany will also report its official data on factory orders.

On Wednesday September 7^th, 2011, Federal Reserve Bank of Chicago’s President Charles Evans will address publicly at an event which will be closely watched to get hints on future direction of monetary policy. The US Federal Reserve will also publish its Beige Book on Wednesday.

On Thursday, September 8^th, 2011, United States will report its weekly data on initial jobless claims along with data on crude oil inventories and country’s trade balance. President Obama will also address Congress on country’s employment situation. In euro zone, ECB will release its key interest rate which will be of importance for exchange rates.

The euro weakened on Tuesday against the US dollar after disappointing euro zone’s GDP data. As per the region’s official report the gross domestic product declined to 0.2 percent as compared to 0.8 percent in prior quarter while analysts were expecting the figure of 0.3 percent. The single currency dropped 0.25 percent to 1.4408 versus the US dollar. The pair EUR/USD is expected to find support around 1.4105 while its resistance could be seen at 1.4475. The Euro also declined 0.63 percent versus the British Pound to 0.8756 while the pair EUR/YEN was down 0.28 percent to 110.66 at the time of writing.

The greenback also remained under pressures on disappointing US economic data. The US dollar dropped 0.07 percent to 76.79 on Tuesday. The pair USD/YEN is expected to find support at 76.31 while its resistance could be seen at 77.22 level. The greenback also declined versus the British Pound as the pair GBP/USD rose 0.38 percent to 1.6454.

The pair GBP/USD is expected to find support at 1.6112 while resistance could be seen at 1.6477. The British Pound also gained 0.31percent versus the Japanese Yen to 126.35.

The US dollar gained on Tuesday as US Senate passed US debt bill. The dollar index DXY which measures the greenback’s performance against its major six rival currencies jumped to 74.496 on Tuesday as compared to 74.443 before the approval the debt bill.

The US dollar gained to 77.06 against the US dollar on Tuesday as compared to 76.27 on Monday’s North American trading session. The greenback also strengthened against the single currency as the euro declined to 1.4196 as on Tuesday as compared to 1.4268 on Monday’s late trading hours.

However against the Swiss franc US dollar plunged heavily and reached its record low of 76.40 on Tuesday. Swiss franc remained main focus of the investors due to safe haven status.

Australian dollar also weakened against the US unit and fell 1.7 percent on Tuesday against the greenback to 1.0791.

Major events that have significant affect on the trading of pair EUR/USD for the coming week are as follows:

There are no significant events on Monday to move exchange rates, however on Tuesday July 26th, 2011, market research group Gfk will publish a report on German consumer climate in euro zone. In United States data on new home sales will be reported along with data on consumer confidence and house price inflation.

On Wednesday July 27th, 2011, Germany will release is numbers on consumer price inflation in euro zone. In United States, official data on durable goods orders will be reported along with data on crude oil stockpiles. Moreover, US Federal Reserve will also publish its Beige Book on Wednesday.

On Thursday July 28th, 2011, United States will report its weekly data on initial jobless claims along with report on pending home sales. In euro zone Germany is will report its official data on employment change.

On Friday July 20th, 2011, United States will release the data on several economic indicators including its gross domestic product and employment cost index. Moreover, the country will also report its data on Chicago’s manufacturing activity. Revised data on consumer sentiment and inflation expectations will also be published in United States.

In euro zone, preliminary data on consumer price inflation will be reported while Germany will report its official numbers on its retails sales.

The US dollar remained under pressure on Wednesday after the release of report on US Existing Home Sales. Existing home sales declined to 4.77 million last month as compared to 4.81 million in preceding month while analysts expected the increase of 4.92 million. The US dollar plunged 0.52 percent to 78.77 versus the Japanese Yen at the time of writing. The pair USD/JPY is expected to find support 78.71 while its resistance could be seen at 79.32.

The US dollar also weakened against its other counter parts as the single currency gained 0.42 percent to 1.4216 versus the greenback. The pair EUR/USD is expected to find support at 1.4015 while its resistance could be seen at 1.4240. The euro also gained 0.23 percent versus the Pound Sterling to 0.8800 whereas dropped 0.09 percent versus the Japanese Yen to 111.98 at the time of writing.

The US dollar also remained under pressure versus the British Pound as the pair GBP/USD advanced 0.22 percent to 1.6160 at the time of writing on Wednesday. The pair GBP/USD is expected to find support at 1.6006 while its resistance could be seen at 1.6178. British Pound however declined 0.29 percent versus the Japanese yen to 127.28.