The USD/CHF pair continues its ascent, reaching two-month highs around 0.8700 during the Asian session on Monday, fueled by a strengthening US Dollar (USD). Recent positive economic data from the United States has heightened expectations for a more cautious stance from the Federal Reserve (Fed) in November.
On Friday, the Michigan Consumer Sentiment Index rose to 70.5 in October, up from 68.9, exceeding forecasts of 69.0. Additionally, Durable Goods Orders fell by only 0.8% month-over-month in September, a smaller decline than the anticipated 1.0%.
The USD is bolstered by higher Treasury yields, with the US Dollar Index (DXY) trading around 104.50. The 2-year and 10-year US Treasury yields are currently at 4.12% and 4.27%, respectively.
In the context of the upcoming US presidential election, allies of former President Donald Trump have faced multiple court defeats in key battleground states over the past three weeks, which may impact the outcome of the November 5 election against Democratic candidate Vice President Kamala Harris.
Meanwhile, the Swiss Franc (CHF) may struggle as expectations grow for another interest rate cut by the Swiss National Bank (SNB) at its December meeting. Traders are also awaiting the Consumer Price Index (CPI) data for October, set to be released later this week.
The demand for the Swiss Franc as a safe haven may diminish due to easing geopolitical tensions. Following Israel’s airstrikes on Iranian missile and air defense sites early Saturday, the attacks were deemed less aggressive than expected. Iran’s Supreme Leader Ayatollah Ali Khamenei noted that the impact of the strikes “should neither be downplayed nor exaggerated,” suggesting a stabilizing situation in the region.
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