Solid Gold Berjangka – The USD/CHF pair weakened for the third consecutive day during Asian trading on Thursday (October 22), hovering around 0.8230. The pressure stems primarily from a softer US dollar, following recent economic data that signaled a slowdown—notably a decline in new home construction and a drop in pending home sales to record lows.
The market currently assigns an approximately 84% probability that the Federal Reserve will keep interest rates unchanged at next week’s meeting. However, expectations for a rate hike in December remain around 90%, leaving the dollar’s trajectory highly sensitive to inflation trends and the latest commentary from Fed officials.
Conversely, the dollar could find support from rising oil prices, which have reignited inflation concerns. Oil prices climbed following a drone attack on Saudi Aramco’s Shaybah oil field, heightening tensions in the Middle East and raising fears of potential energy supply disruptions.
Geopolitical risks have also intensified after Ukraine launched a large-scale drone attack on several Russian oil infrastructure facilities. This has fueled market concerns regarding global energy supplies while increasing the likelihood that inflation will remain elevated—a factor that could reinforce the case for the Federal Reserve to maintain a tight monetary policy.
Although USD/CHF remains under pressure, the decline may be limited, as the Swiss franc also faces headwinds due to a significant interest rate differential with the United States. The relatively low interest rates in Switzerland have led to the franc being increasingly used as a funding currency for "carry trade" strategies; consequently, persistent selling pressure on the Swiss franc may prevent any deeper decline in the USD/CHF pair. (srh)