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Source: Newsmaker.id
The USD/CHF pair strengthened again, reaching around 0.8260 during the Asian trading session on Wednesday (October 21), following a previous decline. This upward movement was driven by demand for the US dollar as a safe-haven asset, as rising oil prices reignited concerns regarding global inflationary pressures.
Oil prices have climbed amid ongoing negotiations between the US and Iran. While diplomatic efforts are underway, reports suggesting a potential agreement in the near term are considered premature. A meeting between Pakistani officials and Iranian leadership has also drawn market attention, as it relates to efforts to resolve conflicts and ongoing discussions with Washington.
Regarding monetary policy, the market anticipates that the Federal Reserve will maintain interest rates at its meeting next week. According to the CME FedWatch tool, there is an 83.9% probability that rates will remain unchanged, while expectations for a hike in December stand at approximately 90%. The neutral stance adopted by Fed official Kevin Warsh has left the market without a clear signal regarding the decision for October.
Meanwhile, the economic situation in Switzerland is also under scrutiny. Data from the Federal Customs Administration indicates that Switzerland’s trade surplus narrowed sharply in September due to an increase in imports, while export growth remained relatively limited. This reduction in the trade surplus is a factor that could constrain the Swiss franc’s strength against the US dollar.
Newsmaker Analysis: The USD/CHF pair remains caught in a tug-of-war between safe-haven demand for the US dollar and pressures stemming from Federal Reserve policy expectations. As long as oil prices remain high and geopolitical tensions persist, the dollar is likely to find support. However, should expectations for a US interest rate hike diminish, the potential for further gains in the USD/CHF pair could become limited. (asd)
Source: Newsmaker.id