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Source: Newsmaker.id
The USD/CHF pair hovered around 0.8210 during the Asian trading session on Friday (October 23), following three consecutive days of decline. While the US Dollar has begun to recover some of its losses, its gains remain limited amid growing skepticism regarding the sustainability of investments in the artificial intelligence (AI) sector, following disappointing earnings reports from several major US technology companies.
Global risk sentiment is also weighed down by escalating tensions in the Middle East. Reports suggesting that the US and Israel are preparing for further strikes against Iran—following the US midterm elections—have fueled demand for safe-haven assets, providing support for currencies such as the Swiss Franc and the Japanese Yen.
Regarding US monetary policy, several Federal Reserve officials have maintained a cautious stance, showing no urgency to accelerate policy tightening. While acknowledging the strength of the US economy, Fed officials have yet to signal when the next interest rate hike might occur. The market currently assigns a 92.8% probability that the Federal Reserve will keep interest rates unchanged at its October 27–28 meeting.
The Swiss Franc is further bolstered by the heightened demand for safe-haven assets. The yield on 10-year Swiss government bonds has fallen toward 0.48% as investors seek refuge from fiscal uncertainty in Europe. Such capital flows are likely to keep the Franc strong against the US Dollar.
Meanwhile, the minutes from the Swiss National Bank (SNB) meeting indicate rising inflationary pressure in Switzerland, though it has not yet spread broadly throughout the domestic economy. The SNB attributes this increase primarily to higher oil prices and the earlier weakening of the Franc. The Swiss central bank has maintained its interest rate at 0%, concluding that no policy adjustments are currently necessary. Newsmaker Analysis: USD/CHF remains at risk of weakening if safe-haven flows continue to favor the Swiss franc and expectations for Federal Reserve interest rate hikes diminish. However, a recovery in the US dollar could curb the pair’s decline in the short term. Geopolitical developments and the direction of Federal Reserve policy will be the primary factors driving the next moves in USD/CHF. (srh)
Source: Newsmaker.id