FX:Forex - Dollar hits 1-month high against Swiss franc
Forexpros - The U.S. dollar advanced to a one-month high against the Swiss franc on Wednesday, as demand for the greenback was boosted by diminished expectations for a third round of quantitative easing from the Federal Reserve.
USD/CHF hit 0.9276 during European morning trade, the pair’s highest since February 16; the pair subsequently consolidated at 0.9258, gaining 0.29%.
The pair was likely to find support at 0.9139, Tuesday’s low and resistance at 0.9299, the high of February 16.
Investor’s trimmed back expectations for a fresh round of monetary easing after the Fed upgraded its outlook for the economy in Tuesday’s rate statement.
The Fed said it now expects to see “moderate economic growth” after its January statement said growth would be “modest” and added that higher oil prices could place upward pressure on inflation.
The central bank also acknowledged the recent improvement in the labor market, saying it expected the unemployment rate to “decline gradually.”
However, policymakers reiterated their intention to keep the benchmark interest rate unchanged at a record low through late 2014 and warned that risks to the economic recovery still remained.
The greenback was also boosted after data on Tuesday showed that U.S. retail sales rose to a five-month high of 1.1% in February, coming after data last week showing that the U.S. economy added more jobs than forecast last month.
In Switzerland, a report showed that economic sentiment improved this month, rising significantly for the third consecutive month.
The Centre for European Economic Research (ZEW) said its indicator of economic sentiment improved by 21.2 points to a flat reading of 0.0 from a reading of minus 21.2 in February.
The Swissie was lower against the euro, with EUR/CHF rising 0.22% to hit 1.2103 ahead of the Swiss National Bank’s monetary policy meeting on Thursday.
Later in the day, the U.S. was to produce official data on the country’s current account, as well as data on import prices and crude oil stockpiles. In addition, Fed Chairman Ben Bernanke was due to speak; his comments would be closely watched.
