USD/CHF Rebounds Slightly from 13-week Low to 0.8770

USD/CHF hit a 13-week low of 0.8757 during the Asian session on Wednesday, recouping some of its intraday losses and trading around 0.8770 at press time.

USD/CHF’s decline was linked to easing comments from Federal Reserve Governor Christopher Waller. Waller hinted that the Fed may not insist on maintaining high interest rates if inflation continues to decline, which may be one of the reasons for the downward pressure on the exchange rate.

There appear to be differences of opinion within the Fed over the future path of interest rates. Fed Governor Christopher Waller recommended a more accommodative approach, while Fed Governor Michelle Bowman said the U.S. Federal Reserve may need to keep policy rates higher than pre-pandemic levels . In addition, New York Fed President John Williams found the decline in inflation encouraging, but reiterated that the Fed is committed to returning inflation to target levels.

The U.S. dollar is retreating against major currencies, with mixed U.S. data leading to subtle changes in market sentiment. While the U.S. home price index (monthly rate) remained at 0.6% in September, beating expectations, the Conference Board consumer confidence index rose to 102.0. However, the Richmond Fed Manufacturing Index was negative 5, contrary to expectations of a positive reading.

Investors are now turning their attention to key events, including the preliminary annualized estimate of U.S. third-quarter gross domestic product and the release of the Federal Reserve’s Beige Book, which will provide a comprehensive picture of overall U.S. economic growth.

We will be keeping a close eye on Wednesday’s Swiss ZEW survey–expected, Thursday’s Swiss October actual retail sales and Friday’s Q3 GDP. The release of these data is important for providing insight into economic conditions and influencing market expectations.

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