As the US dollar is rising, USD/CHF approaches the monthly high of 0.8010.
Even if the US government is still closed, the US dollar is rising.
SNB's negative interest rates are made possible by improving inflation risks and the Swiss labor market.
On Wednesday during the Asian trading session, the USD/CHF pair makes a comeback to the monthly high of approximately 0.8010. Even though the US government shutdown is in its second week, the Swiss franc pair gains strength as the US dollar (USD) continues to rise.
The US Dollar Index (DXY), which measures the value of the US dollar relative to six other major currencies, is up 0.3% to close to 98.90 at the time of writing. For the past two months, this is the highest level observed.
In light of the current government shutdown, US President Donald Trump issued a warning on Tuesday that the White House may rescind some of its spending initiatives. According to Reuters, Trump also promised to release information about federal agency layoffs within the next four to five days. Such a situation would be detrimental to US stocks and solidifies wagers that the Fed would continue to loosen its monetary policy for the rest of the year.
Investors' attention will be on the Federal Open Market Committee's (FOMC) September policy meeting minutes, which are scheduled to be released at 18:00 GMT on Wednesday. During the policy meeting, the Fed signaled two more rate cuts for the rest of the year and lowered interest rates by 25 basis points (bps) to 4.00%-4.25%. According to the CME FedWatch tool, traders also believe that there is an 82% chance that the Fed will lower interest rates by 25 basis points (bps) in each of its two policy meetings left this year.
There is optimism that the Swiss National Bank (SNB) will eventually drive interest rates into negative territory in light of the country's growing unemployment rate and waning inflationary pressures. Monday's unemployment rate for September was 3%, which was higher than the 2.9% rate for August. As anticipated, the Consumer Price Index (CPI) deflated by 0.2% month over month in September, which was quicker than the 0.1% deflation in August.
Even if the US government is still closed, the US dollar is rising.
SNB's negative interest rates are made possible by improving inflation risks and the Swiss labor market.
On Wednesday during the Asian trading session, the USD/CHF pair makes a comeback to the monthly high of approximately 0.8010. Even though the US government shutdown is in its second week, the Swiss franc pair gains strength as the US dollar (USD) continues to rise.
The US Dollar Index (DXY), which measures the value of the US dollar relative to six other major currencies, is up 0.3% to close to 98.90 at the time of writing. For the past two months, this is the highest level observed.
In light of the current government shutdown, US President Donald Trump issued a warning on Tuesday that the White House may rescind some of its spending initiatives. According to Reuters, Trump also promised to release information about federal agency layoffs within the next four to five days. Such a situation would be detrimental to US stocks and solidifies wagers that the Fed would continue to loosen its monetary policy for the rest of the year.
Investors' attention will be on the Federal Open Market Committee's (FOMC) September policy meeting minutes, which are scheduled to be released at 18:00 GMT on Wednesday. During the policy meeting, the Fed signaled two more rate cuts for the rest of the year and lowered interest rates by 25 basis points (bps) to 4.00%-4.25%. According to the CME FedWatch tool, traders also believe that there is an 82% chance that the Fed will lower interest rates by 25 basis points (bps) in each of its two policy meetings left this year.
There is optimism that the Swiss National Bank (SNB) will eventually drive interest rates into negative territory in light of the country's growing unemployment rate and waning inflationary pressures. Monday's unemployment rate for September was 3%, which was higher than the 2.9% rate for August. As anticipated, the Consumer Price Index (CPI) deflated by 0.2% month over month in September, which was quicker than the 0.1% deflation in August.
