The USD/CHF pair retreated to approximately 0.8875 during the early European session on Monday, weighed down by a softer US Dollar (USD). Market participants now await the release of Swiss Industrial Production data for the third quarter (Q3) and Federal Reserve (Fed) official Austan Goolsbee’s speech later in the day for further market cues.
USD Pressures: Trump Trades Fade, Data Caps Downside
The Greenback weakened as enthusiasm around “Trump Trades” waned, though strong US economic data limited its losses. On Friday, US Retail Sales exceeded expectations, rising 0.4% in October compared to the anticipated 0.3%. This followed a revised 0.8% increase in September, reflecting resilient consumer activity.
Fed officials also contributed to a mixed outlook. Boston Fed President Susan Collins reiterated that current monetary policy remains restrictive but left the door open for a potential December rate cut, contingent on incoming economic data. Similarly, Chicago Fed President Austan Goolsbee emphasized the importance of a cautious approach, noting markets often overreact to rate adjustments.
Safe-Haven Appeal for CHF
Renewed geopolitical tensions between Russia and Ukraine bolstered demand for safe-haven assets, including the Swiss Franc (CHF). A report by CNN on Sunday revealed that the Biden administration had authorized Ukraine to use US weapons for strikes within Russia, signaling a significant shift in US policy. Such developments have heightened geopolitical risks, further supporting the CHF.
Outlook for USD/CHF
The USD/CHF pair is likely to remain influenced by a mix of economic data and geopolitical developments. Key factors to watch include:
Swiss Data: The Q3 Industrial Production figures could offer insights into Switzerland’s economic health and influence CHF movements.
Fed Signals: Goolsbee’s comments later on Monday will be closely analyzed for hints regarding future rate decisions.
Technical Levels
Resistance: Immediate resistance is seen around 0.8900, with a break above this level potentially targeting 0.8950.
Support: On the downside, 0.8850 serves as initial support, with a breach exposing 0.8800 as a critical threshold.
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