- USD/CHF is falling back to the 0.8800 handle.
- The US dollar fell more than 3% for November against the rebounding Swiss franc.
- The upcoming minutes of the Fed meeting could jump-start the markets for the close of Tuesday’s trading.
USD/CHF continues its decline on Tuesday, heading towards 0.8800 as investors prepare for the final Federal Reserve (Fed) meeting minutes at 2:00 PM EST.
The Swiss Franc (CHF) has been on the rise recently, with Switzerland enjoying moderate inflation compared to the rest of the European bloc, while the Swiss National Bank (SNB) regularly sells off its foreign reserves.
SNB flows force CHF higher, Fed could miss investor expectations
The SNB’s foreign exchange reserves have reached massive levels over the past few years, approaching the size of Switzerland Gross domestic product. The SNB it routinely buys foreign currencies directly to prevent the rapid appreciation of the desirable CHF in an effort to defend its domestic exporters.
But when the SNB’s balance sheet gets too big, they are forced to turn flows back to the foreign exchange markets, dumping foreign cash reserves and buying back francs, driving the price up steadily.
The upcoming minutes of the Fed meeting could cheer US dollar (USD) markets. Investors braced for a dovish Fed move after last week’s inflation data fell short of expectations, prompting markets to celebrate the end of the rate hike cycle and look forward to a potential rate cut.
A hawkish presentation from the Fed’s meeting minutes could throw cold water on market participants’ expectations and shake the US dollar as investors scramble to adjust their outlook.
Today’s price of the Swiss franc
The table below shows today’s percentage change in the Swiss Franc (CHF) against the major listed currencies. The Swiss franc was the strongest against the euro.
The heat map shows the percentage changes of major currencies against each other. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you select the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change shown in the box will be EUR (base)/JPY (rate).
USD/CHF Technical Outlook
Against the US dollar, the Swiss franc eased from a near 10-year high of 0.8552 in 2023 in July to 0.9244 in early October, but the franc recovered to regain American dollar over the 0.9000 handle and the pair sinking back towards 0.8800.
USD/CHF spent most of October and early November hanging on the 200-day simple moving average (SMA) between 0.9050 and 0.9000, but the pair is currently seeing an acceleration to the downside as CHF resumes its uptrend.
The 50-day SMA made an upward crossover of the longer 200-day SMA in early November, but bearish action is set to cause the 50-day SMA to retrace downwards, which would provide technical resistance for any bullish close. – the term plays in USD/CHF.