Solid Gold Futures – The USD/CHF pair held steady around 0.8210 during Asian trading on Friday (October 23), following a three-day losing streak. The US dollar attempted to recover some of its losses, but its gains remained limited due to growing skepticism regarding the sustainability of the artificial intelligence-driven stock market rally, alongside a deterioration in global risk sentiment.
Investor confidence in the technology sector waned after several major US tech companies reported earnings that fell short of market expectations. This triggered a sell-off of riskier assets and boosted demand for safe-haven currencies, including the Swiss franc and the Japanese yen.
Risk-averse sentiment has intensified amid escalating geopolitical tensions in the Middle East. Reports concerning potential further military action by the US and Israel against Iran—following the US midterm elections—have heightened market concerns, keeping demand for the Swiss franc robust and capping any upside for USD/CHF.
Regarding monetary policy, the Federal Reserve has shown no immediate urgency to raise interest rates. The market currently assigns a 92.8% probability that the Fed will keep rates unchanged at its October 27–28 meeting, particularly after Fed official Kevin Warsh offered no clear signal regarding the need for further tightening.
Meanwhile, the Swiss National Bank has maintained its policy interest rate at 0%, as inflation remains within a manageable range. Despite low Swiss interest rates, safe-haven inflows could continue to support the franc should global uncertainty persist. Consequently, USD/CHF remains at risk of further downward pressure, especially if the US dollar stays weak and geopolitical tensions continue to worsen. (srh)