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Source: Newsmaker.id
The USD/CHF pair rebounded to around 0.8250—a gain of 0.56% during Friday’s (October 23) trading session—after previously touching a one-month low of 0.8191. The strengthening of the US dollar followed a recovery in Treasury yields, as investors—who had earlier flocked to safe-haven assets amid concerns regarding the sustainability of AI-related investments—shifted their focus.
The yield on the 10-year US Treasury note moved back toward 5% following a sharp decline the previous day. Meanwhile, the US Dollar Index (DXY) hovered around 101.75, having previously hit a three-week low. These conditions provided the USD with room to recover some ground against the Swiss franc.
US economic data presented mixed signals. The manufacturing PMI for October improved, coming in above expectations, while the services sector experienced a slowdown. Separately, the University of Michigan’s consumer sentiment index was revised upward, while one-year and five-year inflation expectations remained unchanged.
Market attention is now focused on next week’s Federal Reserve decision. The Fed is expected to hold interest rates steady, following a 25-basis-point hike in September. However, the possibility of further rate increases before the end of the year remains, as rising energy prices—driven by tensions in the Middle East—could potentially keep inflation elevated.
In Switzerland, pressure on the franc continues to be influenced by the Swiss National Bank’s (SNB) policy of maintaining interest rates at 0%. Minutes from the September meeting indicate that the SNB views current monetary conditions as appropriate for maintaining price stability, with no immediate urgency to tighten policy.
Newsmaker Analysis: The USD/CHF pair is likely to remain volatile as the dollar begins to find support from recovering US yields, while the Swiss franc loses some of its safe-haven momentum. However, if the market shifts back into "risk-off" mode due to geopolitical uncertainty or concerns regarding the AI sector, demand for the franc could rise once again, limiting any gains in USD/CHF.
Source: Newsmaker.id