Forex News
- USD/CHF retreats to the mid-0.8200s after hitting 16-month highs at 0.8380 earlier this week.
- Switzerland's low government debt is supporting the CHF as concerns about budget deficits grow.
- Commerzbank analysts affirm that the Swiss Franc might have already reached a bottom.
The Swiss Franc (CHF) is emerging as a safe haven amid the global government bonds sell-off, showing a surprising comeback against an otherwise firm US Dollar (USD) this week, as Switzerland's sound fiscal position stands out with government debt escalating amid the world's leading economies. Against this backgdrop, the USD/CHF pair has dropped about 1.2% over the last two days, hitting daily lows at 0.8266 after hitting 16-month highs at 0.8382 earlier this week.
Risk aversion has prevailed this week, as global treasury yields escalate. Investors are demandinghigher returns to buy government bonds, as budget deficits increase and high energy prices force most of the major central banks to tighten their monetary policies.
Swiss Franc seen supported as deficit concerns come to the fore
In this context, Switzerland stands out with a total net debt of CHF 149 billion, which is about 15% of the country’s Gross Domestic Product (GDP). In contrast, France’s debt has reached 119% of GDP, raising concerns about a new credit crisis in the Eurozone. The US shows a 125% debt-to-GDP ratio, while Japanese debt is well above 200% of its Gross Domestic Product, just to give an idea.
The low debt has offset the unfavourable monetary policy divergence that has crushed the Swiss Franc during the last few months. Moderate Swiss Inflation and an uncertain economic outlook amid the trade rift with the US have forced the Swiss National Bank (SNB) to keep interest rates steady at 0%. With global central banks tightening their monetary policies, the comparatively low SNB rates have attracted the attention of carry traders and threatened to send the CHF into a tailspin.
Looking ahead, analysts at Commerzbank highlight that the Swiss Franc is set to benefit as fiscal worries are increasingly shaping FX dynamics into year-end. They warn that there might be moments of CHF weakness in periods of stabilisation, but they also affirm that "the Franc has probably reached its low point in recent weeks and will not depreciate further in the near future.”
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.
Brown Brothers Harriman’s Elias Haddad reports EUR/USD has slightly recovered after hitting fresh cyclical lows, with support at 1.1200 and 1.1111. Mixed Eurozone CPI keeps inflation above target and allows the ECB scope for further hikes, but stronger US growth and France’s worsening budget situation leave EUR/USD risks skewed to the downside over the coming months.
Euro supported but risks still lower
"EUR/USD recovered slightly after making fresh cyclical lows at 1.1215 yesterday. Immediate support levels for EUR/USD are offered at 1.1200 (August-September 2024 double top) and 1.1111 (50% retracement of 2025-2026 uptrend)."
"Eurozone September preliminary CPI inflation was mixed. Headline ran hot, but underlying measures tracked expectations:"
"Overall, above target Eurozone inflation and a firmer growth outlook give the ECB scope to deliver more hikes. The swaps curve implies nearly 75bps of tightening to 3.25% in the next twelve months."
"That limits policy divergence with the Fed and the drag on EUR/USD. However, stronger US growth traction relative to the Eurozone and France’s worsening budget crisis keeps EUR/USD risks skewed to the downside."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Euro faces intense selling pressure against its peers as French fiscal worries mount.
- France vows to reduce its budget deficit to the European Union limit of 3% by 2029.
- Inflation data of September from both the Eurozone and Japan has come in hotter-than-projected.
The Euro (EUR) trades lower against its major currency peers due to mounting fiscal worries in France. In the European trade, the major currency is down 0.35% at around 177.00 against the Japanese Yen (JPY).
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | -0.07% | -0.24% | 0.15% | -0.05% | -0.04% | -0.29% | |
| EUR | -0.13% | -0.19% | -0.37% | 0.00% | -0.15% | -0.15% | -0.41% | |
| GBP | 0.07% | 0.19% | -0.17% | 0.23% | 0.03% | 0.04% | -0.21% | |
| JPY | 0.24% | 0.37% | 0.17% | 0.39% | 0.18% | 0.19% | -0.05% | |
| CAD | -0.15% | -0.00% | -0.23% | -0.39% | -0.22% | -0.21% | -0.45% | |
| AUD | 0.05% | 0.15% | -0.03% | -0.18% | 0.22% | 0.00% | -0.23% | |
| NZD | 0.04% | 0.15% | -0.04% | -0.19% | 0.21% | -0.01% | -0.23% | |
| CHF | 0.29% | 0.41% | 0.21% | 0.05% | 0.45% | 0.23% | 0.23% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The Euro is under pressure as bond yields in France have rallied to the highest since 2002 at 4.96% due to mounting fiscal worries. A report from Associated Press (AP) showed that the public debt in France now stands at 119% of Gross Domestic Product (GDP).
France aims to reduce its budget deficit from a target of 5% of economic output next year to the European Union limit of 3% by 2029. France’s Finance Minister (FM) Roland Lescure also presented the country’s 2027 budget bill on Thursday, stating that the plan will put public finances back on track for budget consolidation, Reuters report.
However, market experts doubt that the minority government in France would be able pass the budget at Parliament without concessions.
Brown Brothers Harriman’s (BBH) Elias Haddad highlights mounting fiscal challenges in France, signaling caution that they “doubt the proposal will clear parliament without significant concessions,” underscoring the political hurdles to meaningful consolidation.
Even if a compromise is reached, BBH points out that France’s fiscal watchdog has warned the economic assumptions embedded in the “2027 draft budget are ‘optimistic’,” raising questions over the credibility of the medium-term path. Against this backdrop, the bank argues that “a rollover of the 2026 budget is the most likely outcome given the limited appetite for compromise before the presidential election on April 18, 2027.”
BBH estimates that such an outcome “could push the deficit from 5.4% of GDP in 2026 to roughly 6.0% in 2027,” a deterioration that would take France “further away from its European Commission commitment to bring it below 3% by 2029.”
On the economic front, preliminary Eurozone Harmonized Index of Consumer Prices (HICP) data for September has come in stronger-than-expected. The headline HICP arrives at 3.8% Year-on-year (YoY), higher than 3.6% estimates and the August reading of 3.2%.
In Japan, Tokyo’s Consumer Price Index (CPI) data for September also came in hotter-than-expected. Tokyo CPI ex. Fresh Food rose by 2.7% Year-on-Year (YoY), faster than 2.4% estimates and the previous reading of 1.8%. The headline inflation accelerates to 2.7% from 1.9% in August.
Economic Indicator
Harmonized Index of Consumer Prices (YoY)
The Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.
Read more.Last release: Fri Oct 02, 2026 09:00 (Prel)
Frequency: Monthly
Actual: 3.8%
Consensus: 3.6%
Previous: 3.2%
Source: Eurostat
Brown Brothers Harriman’s (BBH) Elias Haddad warns France’s budget crisis is deepening and complicating Eurozone fiscal dynamics. A minority government’s deficit-reduction plan faces parliamentary hurdles, while the fiscal watchdog calls assumptions optimistic. A likely rollover of the 2026 budget could push the deficit higher, moving France further from its EU commitment to bring it below 3% of GDP by 2029.
Fiscal slippage seen as likely
"Yesterday, France’s minority government presented details of a plan to reduce the country’s budget deficit to 5.0% of GDP next year. We doubt the proposal will clear parliament without significant concessions."
"Even then, France’s fiscal watchdog warned that the economic assumptions in the 2027 draft budget are “optimistic.”"
"A rollover of the 2026 budget is the most likely outcome given the limited appetite for compromise before the presidential election on April 18, 2027."
"That could push the deficit from 5.4% of GDP in 2026 to roughly 6.0% in 2027, taking France further away from its European Commission commitment to bring it below 3% by 2029."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Nordea’s Global Macro team of Tuuli Koivu, Jan von Gerich and Anders Svendsen note Euro-area inflation accelerated in September, driven mainly by energy and food. They note that core inflation remains relatively stable and broader price pressures are moderate and add that they do not expect the European Central Bank (ECB) to raise rates at the upcoming policy meeting.
Energy-driven rise keeps ECB cautious
"Euro-area inflation continued to accelerate in September mainly due to higher energy and food inflation."
"Furthermore, predicting the future energy price pressures is challenging at the moment given the extremely high uncertainty regarding the developments in the oil market. On one hand, the geopolitical tensions in the Middle East do not show signs of cooling down but at the same time, the most recent estimates about the global oil production and the positive information about the traffic in the Red Sea imply that there could be room for positive surprises from that segment."
"Thus, we keep keep our forecast of rate hikes in December and in March unchanged and do not see another hike already in October to be likely at this point."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Brown Brothers Harriman’s Elias Haddad notes the recent US Dollar rally and bond selloff have stalled as FOMC officials temper expectations for an October rate hike. However, the Dollar uptrend since the hot August CPI and September Fed hike remains intact, supported by resilient US growth, strong labor demand and sticky inflation ahead of September NFP data.
Dollar rally pauses before payrolls
"Meanwhile, the USD rally and bond market selloff stalled. This week’s comments by three FOMC heavyweights helped trim bets of a back-to-back hike in October."
"The USD uptrend sparked by the hot August CPI print in early September and turbocharged by the Fed’s hawkish hike on September 16 remains intact. Resilient US economic activity, improving labor demand, and sticky inflation back the case for additional Fed tightening."
"The Atlanta Fed GDPNow model estimates above trend annualized real GDP growth of 3.7% in Q3 vs. 2.2% in Q2. Today, the September nonfarm payrolls (NFP) report will provide a fresh gauge of labor demand (1:30pm London, 8:30am New York)."
"Consensus is looking for NFP gains of +90k vs. +162k in August. Bloomberg’s whisper number is +84k while ADP private payrolls and Revelio Labs employment imply NFP gains of +67K."
"Fed Funds futures imply 75bps of hikes over the next twelve months."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
MUFG’s Derek Halpenny notes that rising rates volatility is driving a broader unwind of EM FX carry trades, with LatAm currencies under particular pressure. USD/MXN has surged and MXN long leveraged positions are being squeezed as implied volatility jumps.
Volatility-driven unwind in LatAm FX
"We have been flagging the increased risk of the volatility in the rates market spreading to other markets and the increased risks of a broader liquidation of carry positions. EM FX is certainly seeing that now with significant moves in LatAm FX as carry liquidation intensifies."
"Since the middle of September USD/MXN has now jumped 8% and is the worst performing LatAm currency since the start of September. IMM positioning data explains why MXN is suffering. The latest data shows Leveraged Funds’ long position at the highest level since the start of 2023."
"This risk aversion could well have further to go. In G10, the Swiss franc and the yen were the top performing currencies yesterday and those moves could extend further."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- EUR/USD trades practically flat around 1.1250 after pulling back from session highs near 1.1270.
- The Euro is on track for a 1.26% weekly selloff, hit by France's fiscal concerns and high Oil prices.
- Eurozone inflation accelerated beyond expectations in September amid higher food and energy prices.
The Euro (EUR) is practically flat against the US Dollar (USD) on Friday, with the EUR/USD pair trading at the mid-1.1200s, still close to the 16-month low of 1.1210 hit on Thursday. Eurozone inflation figures have added pressure on the European Central Bank (ECB) to tighten its monetary policy further, but high Oil prices and increasing concerns about France’s fiscal health are keeping Euro buyers away.
September’s preliminary Harmonised Index of Consumer Prices (HICP) revealed that inflation accelerated to a 3.8% year-over-year (Y-o-Y) rate, from 3.2% in August, beating expectations of a more moderate increase to 3.6%. The report suggests that food and, most likely, energy prices are the main drivers for the rise, as the core HICP ticked up to 2.5%, from 2.4%, in line with market expectations.
Oil prices are pulling lower on Friday, with the barrel of Brent Crude retreating below the key $100 level amid reports that supplies from Gulf countries increased sharply in September. Crude Oil, however, has rallied more than 30% over the last three months and remains at levels that pose a critical risk to Eurozone economies.
The US Dollar rallies amid the global bonds' rout
The Greenback, however, keeps drawing support from risk-averse sentiment, amid the global bonds’ rout, which has pushed long-term US Treasury yields to their highest levels in 24 years. In Europe, concerns about France’s ballooning debt have sent the differential between the French and German government bond yields to fresh 14-year highs, above 140 basis points, spooking investors away from the Euro this week.
France’s public debt has reached levels unseen since the postwar period, which has boosted borrowing costs. The yield for the French 10-year government bond has surged more than 70 basis points in September to reach its highest level since 2002 and bring back echoes of the Eurozone’s 2009 credit crisis.
Investors’ focus will shift now to the release of the US Nonfarm Payrolls report, due later on the day. The market consensus anticipates 90K new jobs in September, with the Unemployment rate seen as steady at 4.1%. These figures would endorse expectations of further monetary tightening by the Federal Reserve (Fed), although recent inflation data have cooled expectations of an interest rate hike in October.
Economic Indicator
Core Harmonized Index of Consumer Prices (YoY)
The Core Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, – released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Core HICP excludes volatile components like food, energy, alcohol, and tobacco. The Core HICP is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.
Read more.Last release: Fri Oct 02, 2026 09:00 (Prel)
Frequency: Monthly
Actual: 2.5%
Consensus: 2.5%
Previous: 2.4%
Source: Eurostat
Economic Indicator
Harmonized Index of Consumer Prices (YoY)
The Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.
Read more.Last release: Fri Oct 02, 2026 09:00 (Prel)
Frequency: Monthly
Actual: 3.8%
Consensus: 3.6%
Previous: 3.2%
Source: Eurostat
Silver prices (XAG/USD) rose on Friday, according to FXStreet data. Silver trades at $61.24 per troy ounce, up 0.43% from the $60.98 it cost on Thursday.
Silver prices have decreased by 13.84% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 61.24 |
1 Gram | 1.97 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 68.38 on Friday, down from 68.51 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.)
ING’s Chris Turner argues that the French debt sell-off has broken the narrative of ever-higher short-term rates and raised doubts about further European Central Bank (ECB) tightening.
Debt stress drives Euro downside
"Markets reached a point of inflection yesterday, where the sell-off in French debt broke the narrative of ever-higher short-term market interest rates. This questions whether central banks are about to extend into policy error territory with tightening cycles. If that is the case, the ECB has less cause to tighten than the Fed, and EUR/USD can stay offered."
"My colleague, Francesco Pesole, wrote a nice article on how the market could easily add another 2% in risk premium to the euro if this bond market sell-off extends. And after the break of technical support yesterday, near-term EUR/USD looks biased to 1.1100/1120, if not closer to 1.10. We would expect upside corrections to be relatively shallow now."
"Investors assume that any ECB fix to the bond market sell-off either involves much less or no tightening of policy (euro bearish) or, in extremis, the use of the Transmission Protection Instrument to buy bonds (very euro bearish)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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