- USD/CHF attracts buyers for the fourth straight day amid a combination of supporting factors.
- A fall in Swiss GDP undermines the CHF and supports the pair amid the recent USD move up.
- Economic woes cap the USD and the major amid softer risk tone and ahead of FOMC minutes.
The USD/CHF pair prolongs its recent recovery from the 0.7880-0.7875 region, or a nearly one-month low touched last week, for the fourth straight day and climbs to an over one-week high during the Asian session on Wednesday. Spot prices currently trade around the 0.8000 psychological mark, with bulls looking to build on the momentum further beyond the 100-day Simple Moving Average (SMA).
The Swiss Franc (CHF) continues with its relative performance on the back of the recent data, which showed that Switzerland’s export-oriented economy contracted in the third quarter for the first time in over two years. The US Dollar (USD), on the other hand, sits near a one-week high amid reduced bets for another interest rate cut by the US Federal Reserve (Fed) in December. This turned out to be a key factor acting as a tailwind for the USD/CHF pair.
The USD bulls, however, seem reluctant to place aggressive bets amid concerns about the weakening economic outlook on the back of the longest-ever US government shutdown, which might prompt the Fed to ease policy further. Hence, FOMC minutes will be scrutinized closely for cues about the Fed’s rate-cut path, which, in turn, will play a key role in influencing the USD price dynamics and provide some meaningful impetus to the USD/CHF pair.
Traders this week will also confront the delayed release of the US Nonfarm Payrolls (NFP) report for September on Thursday amid signs of a softening labor market. In the meantime, reviving safe-haven demand, along with expectations that the Swiss National Bank (SNB) will keep its policy rate at 0% in December amid forecasts of rising inflation, could act as a tailwind for the safe-haven CHF. This, in turn, might cap the upside for the USD/CHF pair.
