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Market Analysis

As safe-haven flows increase due to rising Middle East tensions, the USD/CHF weakens below 0.8500
Amos Simanungkalit · 5.3K Views
13

The USD/CHF pair is experiencing slight losses, trading around 0.8460 in the early European session on Wednesday. Rising geopolitical tensions in the Middle East are driving demand for safe-haven currencies like the Swiss Franc (CHF). Later on Wednesday, traders will focus on the US ADP Employment Change data for September for further guidance.

Meanwhile, reduced expectations for a 50 basis points (bps) rate cut by the Federal Reserve (Fed) in November could provide some support for the USD against the CHF. On Monday, Fed Chair Jerome Powell stated that the central bank remains committed to keeping the US economy stable, although it is not in a rush and will reduce rates gradually over time.

Attention will also turn to the US employment report, due on Friday. A weaker-than-expected jobs report could prompt the Fed to consider more significant rate cuts, potentially putting downward pressure on the USD.

In the Middle East, Iran has launched hundreds of missiles toward Israel, prompting Israeli Prime Minister Benjamin Netanyahu to vow retaliation for the missile strike on Tuesday. US President Joe Biden reaffirmed support for Israel following the attack, dismissing it as "defeated and ineffective." The escalating geopolitical tensions are driving investors toward safe-haven assets like the CHF, creating challenges for the USD/CHF pair.

 

 

 

 

 

 

Paraphrasing text from "FX Street" all rights reserved by the original author.

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