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USD/CHF unfazed by downbeat Swiss trade balance as markets await SNB details

  • USD/CHF remains modestly changed despite weaker than anticipated Swiss trade data.
  • The busy session, trade/political pessimism triggered risk-off.
  • SNB, news reports and the US data will be in the spotlight for now.

Despite lower than expected Swiss trade balance, the USD/CHF pair remains on the back foot while taking rounds to 0.9960 ahead of Thursday’s European session.

August month trade data from Switzerland flashed downbeat signals with the headline Trade Balance falling below 3,383M forecast to 1,588M whereas exports and imports dropped to 15,286M and 16,874M versus 18,249M and 21,934M revised priors respectively. The USD/CHF pair mostly ignores the data as a higher revision to the previous readings and an upcoming SNB decision stops traders.

With the recent doubts over the US-Japan trade deal and escalating tension surrounding Saudi Arabia, the quote bears the burden of risk-off momentum. Also adding to the safe-haven demand could be a busy Asian session having multiple economic releases, central bank announcements, which in turn drags the US 10-year Treasury yield southward to 1.78% by the time of writing.

The pair rose to a three-month high on Wednesday after the US Federal Reserve raised bars for further rate cuts following a 0.25% Fed rate reduction.

Investors will now focus on the interest rate decision and the quarterly monetary policy assessment report by the Swiss National Bank (SNB). Danske Bank anticipate SNB to be a market mover today while saying, “We look for the Swiss National Bank (SNB) to keep policy rates unchanged at -0.75% despite the ECB cut last week: in light of the move higher in Swiss (and euro) rates after the ECB amid a higher EUR/CHF, we do not see a need for the SNB to test unchartered territory on rates at present.”

Following the central bank announcement, traders will keep an eye over the US-China trade developments as executives from both the economies will discuss the basics of the key talks in October starting from today. On the economic calendar, the US Existing Home Sales and Philadelphia Fed Manufacturing Survey seem to entertain the traders during the rest of the day.

Technical Analysis

Having failed to hold upside momentum beyond 200-day simple moving average (SMA), pair’s declines below 0.9950 key SMA could please sellers with early-month high surrounding 0.9930 before recalling 100-day SMA level of 0.9910 and 0.9900 round-figure. On the contrary, pair’s run-up beyond 0.9985 can push bulls to June month high nearing 1.0020.

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