EUR/USD has extended its slide toward 1.0850 in the American session. Profit-taking ahead of the weekend and the negative shift witnessed in risk sentiment seems to be helping the US Dollar gather strength against its rivals, weighing on the pair.
GBP/USD is having a difficult time gathering recovery momentum and trading in negative territory below 1.2400 on Friday. Although the data from the US showed that PCE inflation continued to soften in December, the US Dollar holds its ground heading into the weekend.
Gold price has lost its traction and declined below $1,930 during the American trading hours. The benchmark 10-year US Treasury bond yield clings to modest daily gains above 3.5% ahead of the weekend, not allowing XAU/USD to gain traction.
AAVE, MATIC and DYDX price rallied alongside large market capitalization cryptocurrencies Bitcoin and Ethereum in January. Experts at the crypto intelligence tracker Santiment believe the recent spike in activity by whales on these networks needs to be watched closely.
Inflation in the US, as measured by the Personal Consumption Expenditures (PCE) Price Index, declined to 5% on a yearly basis in December from 5.5% in November, the US Bureau of Economic Analysis reported on Friday.
USD/CHF is the abbreviation for the U.S. dollar and Swiss Franc cross. Trading the USD/CHF currency pair is also known as trading the "Swissie". The Swiss franc is the only franc left in Europe after the rest joined the euro. It is often seen as a safe-haven currency (any globally traded currency that serves as a reliable and stable store of value). In times of uncertainty, the franc usually stays stable or appreciates against its European counterparts. The USD/CHF tends to have a negative correlation with the EUR/USD and GBP/USD currency pairs. This is due to the positive correlation of the euro, Swiss franc and the British pound.
The Swiss Franc is considered to be a “safe-haven” currency: it is expected to increase its value against other currencies in times of volatility, particularly in the stock markets. To avoid an abusive appreciation of its currency (and its consequent drop of Swiss exports) during the worst years of the recent financial crisis, the Swiss National Bank established a maximum price for the Swiss Franc at CHF1.20 per EUR. This exchange-rate peg was established in 2011 and removed without previous notice in January 2015, creating a big shock in the markets and an “immediate aftermath of more than 20% decline in EURCHF”, as Kathleen Brooks reported on FXStreet the next day.
The historic maximum quote for the USD/CHF cross was reached on January 4th 1971 at 4.318 and the minimum on August 8th 2011, at 0.7213.
MOST INFLUENTIAL CURRENCIES FOR USD/CHF
The USD/CHF pair can also be impacted by the moves of other currencies, in particular, the Euro and Yen for being a prominent commercial partner and major currencies too.
MOST INFLUENTIAL ORGANIZATIONS FOR USD/CHF
The organizations that most impact the USD/CHF are the Central Banks of Switzerland (SNB, the Swiss National Bank) and of the United States (Fed, Federal Reserve of the United States), the two countries that issue the currencies that make the pair. Central Banks control the nation's monetary policy, through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.
The central bank of the Eurozone (the ECB, European Central Bank) also has influence on the Swissie due to the importance of business and trade between the UE and Switzerland. Any assessment of possible scenarios linked to a macroeconomic decision taken by the ECB has impact on its commercial partners. The Euro is the second reference currency in the world (after the US Dollar) and any move by its central bank, the ECB, has consequences on the assessment of its partners.
The Bank for International Settlements (BIS) is also an organization to take into account when trading the Swiss Franc. It is an international financial institution owned by central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks". It also provides banking services, but only to central banks and other international organizations. It is based in Basel, Switzerland.
The Swiss Financial Market Supervisory Authority (FINMA) is the Swiss government body responsible for financial regulation. As a state regulatory body, FINMA is endowed with supreme authority over banks, insurance companies, stock exchanges, securities dealers and collective investment schemes.
Finally, the SIX Swiss Exchange (formerly SWX Swiss Exchange), based in Zurich, is Switzerland's principal stock exchange (the other being Berne eXchange). The moves and evolution of this market are watched by CHF traders.