Swiss Franc declines ahead of release of Foreign Currency Reserves data
USD/CHF extends its gains for the third consecutive day, trading around 0.8330 during Asian hours on Wednesday. Switzerland’s seasonally-adjusted Unemployment Rate was unchanged at 3.1% for the fifth month in a row in September. Foreign Currency Reserves for September will be eyed later in the day.
The Swiss Franc (CHF) experienced a decline prior to the release of Foreign Currency Reserves data for September. The USD/CHF pair reached around 0.8330 during Asian trading hours on Wednesday. Despite the SNB's dovish stance and intervention rhetoric, demand for the Swiss Franc as a safe-haven currency remained strong, buoyed by softer US inflation and payrolls, and widening French OAT-Bund spreads.
Political and fiscal concerns in France were highlighted as major drivers of the CHF's reaction function. The US Dollar (USD) gained support from higher crude oil prices, dampening inflationary concerns and rate-hike expectations. The Fed's Schmid speech recorded an 8/10 on the FXS Speechtracker, indicating a slightly more hawkish tone than usual.
The FXS Fed Sentiment Index remained in the hawkish territory above the neutral 100 mark. The Swiss Franc is among the top ten most traded currencies globally and is considered a safe-haven asset due to Switzerland's stable economy, strong export sector, and political neutrality. However, the Swiss Franc's value is influenced by macroeconomic data releases, as well as the health of neighboring Eurozone economies.
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