The USD/CHF has tumbled down to 0.7650 and has attracted some investors in the early European trading on Thursday, as investors are concerned about the independence of the Federal Reserve, a potential US government shutdown, and several regional tensions that are benefiting safe-haven currencies, like the Swiss Franc.
There will be two economic indicators released later this afternoon: The December Trade Balance out of Switzerland and the weekly Initial Jobless Claims from the United States.
Reports today indicated that a partial government shutdown in the United States will become increasingly likely over the next few days, as federal funding for certain agencies is scheduled to end on or after January 30. The New York Times has revealed that both President Donald Trump and Democratic U.S. Senator Chuck Schumer are working on an agreement regarding new restrictions on federal immigration agents.
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In addition, three U.S. Navy aircraft carriers with accompanying warships are now deployed to the Middle East. President Trump stated on Wednesday that he has been constantly pushing Iran for negotiation and formulate a fair and equitable deal. However, if they do not, he warned, they will face a significantly worse attack from the United States than their recent aggressions towards U.S. allies.
According to the wide expectations, the Federal Reserve decided to keep interest rates unchanged. It recently cut rates three times consecutively due to uncertainty regarding the labour force and rising inflation.
Jerome Powell, Fed’s Chair, highlighted at the press conference that the current monetary policy is considered appropriate for all policymakers to encourage progress towards accomplishing the goals of increasing employment and reducing inflation to 2%. He further added that the cautious stance given by the US Central Bank would also facilitate in limiting the USD’s losses in the near term.
