The USD/CHF exchange rate held steady on Tuesday, trading around 0.8640 during the Asian session, following losses in the previous trading day. The US Dollar (USD) remains stable as market participants exercise caution due to rising uncertainty surrounding the US presidential election, coupled with improved US Treasury yields that are providing additional support for the Greenback.
Current opinion polls suggest a near tie between former President Donald Trump and Vice President Kamala Harris, with the election outcome likely remaining uncertain for several days after Tuesday’s vote. Both candidates campaigned vigorously across Pennsylvania, expressing confidence in their prospects as the election drew to a close.
The US Dollar Index (DXY), which gauges the value of the USD against six major currencies, is currently positioned around 103.90. At the same time, yields on US Treasury bonds for the 2-year and 10-year notes are reported at 4.16% and 4.29%, respectively.
Meanwhile, the Swiss Franc (CHF) could face challenges due to an increasing likelihood of significant rate cuts by the Swiss National Bank (SNB). This potential shift arises from a continued deceleration in inflation in Switzerland, as indicated by the Consumer Price Index (CPI), which fell by 0.6% year-over-year in October. This figure is notably below the SNB’s inflation forecast of 1% for the fourth quarter, raising expectations that the SNB may consider a more substantial rate cut in December to maintain inflation within its target range of 0-2%.
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