Forex News
Societe Generale highlights that the Reserve Bank of India has taken proactive steps to support the Indian Rupee, deploying multiple FX-related measures and bond operations. The report notes a risk-off driven reversal in US yields that benefits the Rupee, alongside higher CPI and WPI inflation and a wider trade deficit. The tone is cautiously constructive for INR over the coming days.
RBI actions bolster INR resilience
"The proactive RBI defended the INR by implementing a broad set of FX-support measures this week, including the reintroduction of a dedicated oil import window, tighter restrictions on corporate hedging, limits on uncovered FX transactions, a ban on rebooking cancelled derivatives, and fresh open market operation (OMO) bond sales."
"These steps were complemented by extending FX curbs to GIFT City and broadening the use of risk reserves."
"Risk-off driven sharp reversal in US yields despite strong CPI provides major fillip for the INR."
"On data front, headline CPI accelerated to 5.54% yoy in September from 4.83% in August, while factory gauge WPI jumped to 11.39% yoy from 9.92%."
"Trade deficit widened to $30.2bn in September from $26.86bn in August."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Commerzbank’s Volkmar Baur describes a double bind for the New Zealand Dollar as rising monthly price indices signal higher CPI, while electronic card data show stagnating retail spending and likely negative real consumption. With markets pricing an 80% chance of a Reserve Bank of New Zealand rate hike in two weeks, he remains cautious and flags next week’s CPI as crucial.
RBNZ caught between inflation and growth
"Two data points released this morning nicely illustrate the difficult position the Reserve Bank of New Zealand currently finds itself in. The monthly price index, which covers roughly half of the components of the full CPI data that are only released quarterly, rose sharply to 5.2% year-on-year in September. Energy components were a major driver of the increase, but inflation excluding petrol and diesel also accelerated, from 3.2% in August to 3.6% year-on-year in September."
"At the same time, electronic card transactions point to stagnating retail sales. Seasonally adjusted spending fell by 0.4% compared with August, and even that figure was only cushioned by a marked increase in spending on petrol. Excluding petrol, spending declined by 0.7%."
"Moreover, these figures are nominal. Adjusting for price increases suggests that real consumption growth in New Zealand is currently likely to be clearly negative in year-on-year terms."
"The RBNZ therefore faces a difficult decision when it meets for its next monetary policy meeting in around two weeks. Given the renewed rise in inflation, the market currently assigns a probability of roughly 80% to a rate hike. However, the weakness of economic activity and the continued absence of visible second-round inflation effects make me somewhat more cautious."
"Against this backdrop, next week’s full CPI release will attract even more attention than usual."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- XAU/USD rallies for the second consecutive day and reaches session highs above $4,190.
- The US Dollar remains on the defensive amid dovish comments from Fed officials and lower US Treasury yields.
- Fed Chair Kevin Warsh praised the economic resilience at the IMF forum but failed to provide any monetary policy guidance.
Gold (XAU/USD) heads north for the second consecutive day on Friday, trading near $4,180, with bulls aiming for the $4,230 area, the top of October’s trading range. Precious metals have been boosted by lower US Treasury yields and dovish comments from Federal Reserve (Fed) officials this week, which have undermined speculative support for the Greenback.
US data released on Thursday showed that September's Producer Price Index (PPI) accelerated beyond expectations in September, following an overshoot consumer inflation report in the previous day. Also on Thursday, retail consumption showed a surprising resilience in the face of escalating prices.
The data, however, failed to lift the US Dollar as market expectations of a Fed interest rate hike in October remain low. A string of Fed officials suggested that the bank will stand pat at its next meeting, awaiting more insight into the economic impact of September’s interest rate hike.
The Federal Reserve Chairman, Kevin Warsh, spoke at the International Monetary Fund (IMF) forum in Bangkok earlier on Friday. Warsh praised the resilience of the US economy and reaffirmed the central bank’s commitment to fight inflation, but failed to provide any fresh hints about the bank’s near-term path.
Technical Analysis: Key resistance at the $4,230 area comes into focus
XAU/USD trades at $4,179, maintaining a bullish near-term bias with bulls aiming for the top of the last three weeks' horizontal range, in the $4,230 area. The 4-hour Relative Strength Index (14) is hovering in positive territory near 57, and the Moving Average Convergence Divergence (MACD) remains firmly above zero, hinting at moderate upside pressure.
Gold might find resistance at the $4,200 round area, ahead of the key $4,230 (October 2 high). A successful break of this level confirms a bullish reversal, aiming for the September 25 high at $4,315.
On the downside, initial support is at the intraday low near $4,150 ahead of the range bottom of $4,070. A bearish reaction below here negates the bullish view and increases pressure towards the late July, early August lows around the $4,000 psychological area.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- The Indian Rupee extends its advance against the US Dollar as the latter underperforms.
- Fed’s Warsh stresses price stability and AI-driven demand.
- The INR’s strength on the back of RBI’s measures could turn out to be short-lived.
The Indian Rupee (INR) continues to outperform the US Dollar (USD) on the back of weakness in the Greenback and forceful Reserve Bank of India’s (RBI) measures to curb the US Dollar’s demand by Oil Marketing Companies (OMCs).
As of writing on Friday, the USD/INR pair posts a fresh over five-week low at 94.69. In the European session, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, revisits the six-week low near 101.67.
The US Dollar extends its weakness on Friday, following remarks from Federal Reserve (Fed) Chair Kevin Warsh at the Fireside Chat with International Monetary Fund (IMF) Managing Director Kristalina Georgieva, in which he stressed achieving price stability, surging investment, and Artificial Intelligence (AI)-led structural growth.
Warsh flags investment surge and AI risks as Fed keeps options open into year-end
Fed Chair Warsh’s speech scores 5.6/10 on the FXS Speechtracker, modestly softer relative to the historical average of 6.1/10, reflecting a cautious tone despite upbeat comments on structural growth and an investment surge. The admission of being “over-scarred from the global financial crisis” underscores a bias toward vigilance on financial stability and tail risks, even as Warsh stresses that recent developments have broadly matched the Fed’s expectations and that key policy decisions will crystallize at the October and December meetings. Warsh’s focus on AI as a demand-side force and on field hearings and task forces signals an effort to build new intellectual capital before committing to a clearer policy path, keeping Dollar traders attentive to incoming data on output, employment, and inflation.
The FXS Fed Sentiment Index was unchanged, moving 0.00 points to a still-elevated level of 127.51, consistent with hawkish territory despite the slightly softer speech score on the FXS Speechtracker. The lack of index movement suggests that Warsh’s remarks, while emphasizing caution and uncertainty around AI and tail risks, did not materially shift market perceptions of the Fed’s underlying hawkish stance into the remaining 2026 meetings.
As usual, Fed Chair Warsh has not delivered any meaningful remarks on the monetary policy outlook. Warsh has already stated explicitly that “so-called forward guidance” is not appropriate in the current scenario.
Meanwhile, financial markets remain confident that the Fed will leave interest rates unchanged at the October meeting, but will hike them in December, according to the CME FedWatch tool.
This week, the major trigger for a significant appreciation in the Indian currency remains RBI’s measures to curb the demand of the US Dollar. However, market experts doubt the sustainability of INR’s strength.
RBI steps steady INR but OCBC warns rebound may prove fleeting
Strategists at OCBC highlight that RBI’s measures of limiting access to certain INR non-deliverable derivatives to hedging purposes, extending the 20% cash reserve requirement to banks’ own qualifying FX hedges, and the special USD window for oil companies are merely a shift in demand of the currency from the spot market rather than a reduction in India’s underlying US Dollar requirements.
OCBC concludes that “we may still see room for some near-term INR gains, but the sustainability of the move will depend on whether portfolio outflows moderate and external pressures from oil prices and US yields ease.” For now, they judge that the latest policy steps “may help establish a firmer near-term footing for INR, rather than mark a decisive reversal in its broader depreciation trend.”
Technical Analysis: USD/INR sees more downside to near 94.30
In the daily chart, USD/INR trades below 95.00, keeping a bearish near-term bias as it remains below the 20-period exponential moving average (EMA) at 95.76.
The positioning under this key dynamic barrier suggests the recent slide is still in play, while the Relative Strength Index (RSI) at 32.51 hovers just above oversold territory, hinting that downside momentum is slowing but not yet reversing.
On the topside, immediate resistance is located at the 20-period EMA around 95.76, where any recovery would likely face initial selling pressure. On the downside, the September 3 low at 94.29 is the key support level.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver prices (XAG/USD) rose on Friday, according to FXStreet data. Silver trades at $57.91 per troy ounce, up 0.84% from the $57.42 it cost on Thursday.
Silver prices have decreased by 18.54% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 57.91 |
1 Gram | 1.86 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 72.32 on Friday, down from 72.64 on Thursday.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
(An automation tool was used in creating this post.)
OCBC strategists Sim Moh Siong and Christopher Wong discuss how AI-linked investment has become a key pillar of US growth, equities, yields and Dollar strength. They warn that US-centric AI financing concerns can flip these supports, creating a risk-off environment with lower US Treasury yields and a softer USD, highlighting the Dollar’s growing exposure to an AI investment slowdown.
AI cycle risk for Dollar
"AI has supported US growth, equities, yields and the USD. But that strength cuts both ways. If the investment cycle cools, those same supports could reverse, leaving the dollar vulnerable even in a risk-off environment."
"The USD does not always benefit from risk aversion. When the shock originates in the US, as with the recent AI financing jitters, pressure on US assets can overwhelm the USD’s traditional safe-haven appeal. That matters because AI has become an important pillar of US growth resilience."
"For FX, this creates an unusual combination: risk-off, lower Treasury yields and a softer USD. This is not the typical global risk-off shock where investors simply rush into USD. If the source of stress is US-centric, Treasury safe-haven demand can push yields lower even as weaker US asset returns reduce the relative appeal of the USD."
"For now, we see the latest AI jitters as a bump rather than a break in the broader investment story. Concerns look overdone, but they are far from over. More importantly, the episode is a useful reminder for FX."
"The more the USD benefits from AI-driven US growth resilience on the way up, the more exposed it becomes if that support starts to fade."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Euro strengthens against the US Dollar, recovery intensifies to near 1.1250.
- The AI sell-off narrative in global markets keeps the US Dollar under pressure.
- Fed Chair Warsh signals that the central bank is committed to achieving price stability.
The Euro (EUR) extends its recovery move to near 1.1250 against the US Dollar (USD) in the European trading session on Friday. The major currency pair started recovering after posting a fresh 16-month low near 1.1113 on Wednesday. The EUR/USD pair bounced back as the US Dollar retreated from its yearly high due to Artificial Intelligence (AI) sell-off narrative in global markets.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.30% | -0.44% | -0.02% | -0.19% | -0.58% | -0.85% | -0.39% | |
| EUR | 0.30% | -0.15% | 0.25% | 0.09% | -0.26% | -0.56% | -0.10% | |
| GBP | 0.44% | 0.15% | 0.42% | 0.29% | -0.13% | -0.40% | 0.05% | |
| JPY | 0.02% | -0.25% | -0.42% | -0.14% | -0.53% | -0.78% | -0.35% | |
| CAD | 0.19% | -0.09% | -0.29% | 0.14% | -0.37% | -0.71% | -0.21% | |
| AUD | 0.58% | 0.26% | 0.13% | 0.53% | 0.37% | -0.28% | 0.19% | |
| NZD | 0.85% | 0.56% | 0.40% | 0.78% | 0.71% | 0.28% | 0.48% | |
| CHF | 0.39% | 0.10% | -0.05% | 0.35% | 0.21% | -0.19% | -0.48% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
In the European trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, revisits the six-week low near 101.67.
Dollar’s AI tailwind seen as emerging vulnerability in US-centric risk-off shocks
Strategists at OCBC highlight that AI-linked investment has become a key support for the US macro and market story, noting that “AI has supported US growth, equities, yields and the USD.” However, they caution that “that strength cuts both ways.” If the investment cycle cools, “those same supports could reverse, leaving the Dollar vulnerable even in a risk-off environment.”
OCBC stresses that “the USD does not always benefit from risk aversion.” When the shock is US-centric, “as with the recent AI financing jitters, pressure on US assets can overwhelm the USD’s traditional safe-haven appeal.” This is significant, they argue, because “AI has become an important pillar of US growth resilience.”
In FX terms, OCBC describes “an unusual combination: risk-off, lower Treasury yields and a softer USD.” They emphasise that “this is not the typical global risk-off shock where investors simply rush into USD.” Instead, “if the source of stress is US-centric, Treasury safe-haven demand can push yields lower even as weaker US asset returns reduce the relative appeal of the USD.”
For now, OCBC views “the latest AI jitters as a bump rather than a break in the broader investment story.” While “concerns look overdone, but they are far from over,” the episode is seen as “a useful reminder for FX.” As they conclude, “the more the USD benefits from AI-driven US growth resilience on the way up, the more exposed it becomes if that support starts to fade.”
On the monetary policy front, Federal Reserve (Fed) Chair Kevin Warsh continue to avoid delivering remarks on the monetary policy outlook, but assures that price stability is key motive.
Warsh cautious on crisis scars but highlights investment surge and AI, keeping Dollar focus on upcoming FOMC meetings
Fed Chair Warsh’s speech scores 5.6/10 on the FXS Speechtracker, modestly below the 6.1/10 historical average, signaling a slightly less impactful but still policy-relevant appearance. The admission of being “over-scarred from the global financial crisis” underscores a structurally cautious bias even as Warsh points to structural growth and an investment surge, suggesting a reluctance to pre-commit on rates despite a constructive macro backdrop. Warsh’s emphasis on AI, data confidence, and upcoming field hearings reinforces a forward-looking stance, but the repeated refusal to prejudge meetings keeps Dollar traders focused on the October and December FOMC “crystallizing” decisions rather than this speech alone.
The FXS Fed Sentiment Index was unchanged, moving 0.00 points to a still-elevated level of 127.51, confirming that the overall policy tone remains firmly in hawkish territory despite the slightly softer speech score relative to the historical average. The combination of a high FXS Fed Sentiment Index level and a middling FXS Speechtracker score suggests that Warsh’s remarks neither escalated nor diluted the prevailing hawkish bias, leaving Dollar positioning anchored to expectations for upcoming FOMC outcomes.
EUR/USD Technical Analysis
In the daily chart, EUR/USD trades at 1.1254, keeping a bearish near-term tone as it remains capped by the 20-day exponential moving average (EMA) at 1.1287 overhead. The pair is struggling to reclaim this dynamic barrier, while the Relative Strength Index (14) at 41.9 stays below neutral, suggesting only modest recovery potential at this stage.
On the topside, immediate resistance is located at the 20-day EMA at 1.1287, and a sustained break above this level would be needed to ease downside pressure and allow a more meaningful rebound. On the downside, with no nearby technical supports in the dataset below the market, sellers could attempt to push the pair toward fresh lows, keeping the broader bias tilted to the downside unless price decisively moves above the mentioned moving average.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
MUFG’s Derek Halpenny highlights the Pound’s resilience, with data-supported expectations of Bank of England tightening keeping GBP steady versus the US Dollar since June. However, rising consumer credit, increasing defaults, survey evidence of household vulnerability, and excessive OIS pricing for 100bps of hikes by next September leave the Pound exposed if UK rates reprice lower.
GBP supported yet vulnerable on rates
"The pound continues to show resilience with economic data reinforcing expectations of monetary tightening by the BoE. The pound is roughly unchanged versus the US dollar since the end of June with only the energy-related CAD and NOK outperforming and the yen, helped by yen buying intervention by the MoF, with assistance from the US. So the pound has done well on the back of improving sentiment and evidence of economic resilience."
"The BoE’s quarterly Credit Conditions Survey released earlier this month revealed an increase in defaults on credit card debt for the sixth consecutive quarter underlining the increased strains on UK consumers. Despite this these exposures are increasing with consumer credit up GBP 2.5bn in August to a new record high. If rates remain around these levels, it’s very likely that these figures will deteriorate further in the final quarter of the year."
"So while the backdrop of the economic data has been positive, the outlook does point to increasing risks. The OIS market indicates 100bps of tightening is priced by next September and we continue to doubt the BoE delivering that, especially following the comments from Chief Economist Huw Pill who stated this week that he is sceptical that the UK will require four 25bp rate hikes. But it will be difficult for the markets to adjust lower given the global backdrop of higher rates."
"But in circumstances of a broader move back lower in rates, UK rates could fall more notably. The pound remains vulnerable to signs that recent economic resilience could be undermined by the notable move higher in yields."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/CHF remains under some selling pressure for the second straight day amid a weaker USD.
- Fed rate hike bets and geopolitical uncertainties could limit USD losses and support spot prices.
- Weakness below the 0.8230 confluence support is needed to back the case for further decline.
The USD/CHF pair attracts some follow-through selling for the second straight day on Friday, extending this week's retracement slide from the 0.8400 neighborhood, or the highest since May 2025. The downward trajectory drags spot prices below mid-0.8200s, or a two-week low during the first half of the European session, and is sponsored by a broadly weaker US Dollar (USD).
Despite hot US inflation figures, investors seem convinced that the Federal Reserve (Fed) will keep rates unchanged at the next policy meeting, later this month. Expectations were reaffirmed by Fed Chair Kevin Warsh's neutral remarks earlier today, which, along with the recent sharp decline in US bond yields, dragged the USD to a one-and-a-half-week low and exerted some downward pressure on the USD/CHF pair.
Market participants, however, are still pricing in over a 90% chance that the US central bank will raise borrowing costs again at its December policy meeting amid inflation risks stemming from volatile energy prices. Apart from this, persistent geopolitical uncertainties due to escalating tensions in the Middle East and the US-Iran standoff over the Strait of Hormuz could limit USD losses and support the USD/CHF pair.
From a technical perspective, the recent repeated failures to conquer the 0.8400 mark and the subsequent corrective slide warrant some caution for bullish traders. Spot prices, however, hold marginally above the 200-period Simple Moving Average (SMA) on the 4-hour chart, at 0.8235, which offers initial trend support, while the 38.2% Fibonacci retracement at 0.8230 could act as a key pivotal point for the USD/CHF pair.
Meanwhile, momentum indicators remain weak, with the Relative Strength Index (RSI) hovering near 34 and the Moving Average Convergence Divergence (MACD) below zero with a negative histogram. This suggests that selling pressure still dominates despite the nearby moving-average floor, though a sustained break and acceptance below the 0.8235-0.8230 confluence is needed to back the case for further losses.
The USD/CHF pair might then fall to a lower structural cushion at the 38.2% Fibo. retracement near 0.8223, where buyers could attempt to slow the decline. On the topside, a recovery would need to overcome the 23.6% retracement at 0.8289 to ease bearish pressure and open the way for a more meaningful corrective bounce.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
USD/CHF 4-hour chart
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann see USD/JPY in a near-term range, expecting the Dollar to trade between 157.80 and 158.50 in the 24-hour view. For the 1–3 weeks horizon, they maintain a broader 157.50–159.05 range. Over 1–3 months, they highlight building downward momentum that points to further USD/JPY weakness, though reaching the January low at 152.08 is still uncertain.
Dollar seen consolidating in broad band
"24-HOUR VIEW: USD rose to 158.94 and then fell sharply. When it was at 158.00 yesterday, we indicated that “while downward momentum is starting to build, any further decline may not reach the major support at 157.50.” USD then declined to 157.53 before rebounding to close at 157.98 (-0.21%). Downward momentum has eased with the rebound. Today, we expect USD to range-trade, most likely between 157.80 and 158.50."
"1-3 WEEKS VIEW: On Wednesday (14 Oct, spot at 158.35), we highlighted that USD “has likely moved into a range-trading phase between 157.50 and 159.05.” Two days ago, USD spiked to a high of 158.94. Yesterday, USD declined to 157.53 and then rebounded. As our expected range remains intact, we continue to hold the same view for now."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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