USD/CHF revisits monthly high slightly above 0.8000 as US Dollar trades firmly

• USD/CHF rises to near the monthly high around 0.8010 amid an upbeat US Dollar.
• The US Dollar gains despite the ongoing US government shutdown.
• Easing Swiss job market conditions and downside inflation risks pave the way for SNB’s negative interest rates.

The USD/CHF pair revisits the monthly high around 0.8010 during the Asian trading session on Wednesday. The Swiss Franc pair strengthens as the US Dollar (USD) extends its upside despite the United States (US) government shutdown entering its second week.

During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.3% higher to near 98.90. This is the highest level seen in two months.

On Tuesday, US President Donald Trump warned that the White House could take back some of its spending programs amid the ongoing government closure. Trump also stated that he would provide details on lay-offs in federal agencies in the next four to five days, Reuters reported. Such a scenario would be unfavourable for US equities and cements bets for further monetary policy easing by the Federal Reserve (Fed) in the remainder of the year.

In Wednesday’s session, investors will focus on the release of Federal Open Market Committee (FOMC) minutes for the September policy meeting, which will be published at 18:00 GMT. In the policy meeting, the Fed reduced interest rates by 25 basis points (bps) to 4.00%-4.25% and signaled two more in the remainder of the year. Meanwhile, traders also see an 82% chance that the Fed will cut interest rates by 25 basis points (bps) in each of its two policy meetings remaining this year, according to the CME FedWatch tool.

In the Swiss economy, rising jobless rate and cooling inflationary pressures are pointing to hopes that the Swiss National Bank (SNB) could push interest rates into a negative territory going forward. The Unemployment Rate for September came in at 3% on Monday, higher than 2.9% in August. In September, the month-on-month Consumer Price Index (CPI) deflated by 0.2%, as expected, faster than 0.1% in August.