Investing.com – The U.S. dollar was higher against the Swiss franc on Thursday, trading close to the previous session’s three-week high amid speculation the Swiss National Bank was intervening in the market in an effort to curb the Swissie’s strength.
USD/CHF hit 0.7988 during European morning trade, a daily high; the pair subsequently consolidated at 0.7961, climbing 0.75%.
The pair was likely to find support at 0.7768, the low of August 16 and short-term resistance at 0.8016, Wednesday’s high and a three-week high.
The Swiss National Bank declined to comment on speculation it was intervening in the market by boosting liquidity via the currency forwards market, thus pushing short-term interest rates lower.
Forward market intervention involves selling Swiss francs in short-dated maturities to flood the market with francs, then buying them back at a later date.
On Wednesday, the Swiss National Bank announced that it would take additional measures to curb recent gains in the Swissie, including increasing liquidity to the money market and conducting foreign exchange swap transactions.
But the SNB stopped short of pegging the currency to the euro or intervening directly in the currency market, as some had speculated in recent days, sending the currency higher against its major counterparts.
Swiss Finance Minister Eveline Widmer-Schlumpf said Wednesday she is “concerned” about the franc’s strength and that the government supports the central bank’s efforts to weaken the currency.
Elsewhere, the Swissie was also down against the euro, with EUR/CHF gaining 0.23% to hit 1.1425.
Later in the day, the U.S. was to publish a flurry of economic data, which will help traders gauge the strength of the U.S. economic recovery.
The country was to produce government reports on initial jobless claims, consumer price inflation, existing home sales, manufacturing activity in Philadelphia as well as a report on natural gas stockpiles.
USD/CHF hit 0.7988 during European morning trade, a daily high; the pair subsequently consolidated at 0.7961, climbing 0.75%.
The pair was likely to find support at 0.7768, the low of August 16 and short-term resistance at 0.8016, Wednesday’s high and a three-week high.
The Swiss National Bank declined to comment on speculation it was intervening in the market by boosting liquidity via the currency forwards market, thus pushing short-term interest rates lower.
Forward market intervention involves selling Swiss francs in short-dated maturities to flood the market with francs, then buying them back at a later date.
On Wednesday, the Swiss National Bank announced that it would take additional measures to curb recent gains in the Swissie, including increasing liquidity to the money market and conducting foreign exchange swap transactions.
But the SNB stopped short of pegging the currency to the euro or intervening directly in the currency market, as some had speculated in recent days, sending the currency higher against its major counterparts.
Swiss Finance Minister Eveline Widmer-Schlumpf said Wednesday she is “concerned” about the franc’s strength and that the government supports the central bank’s efforts to weaken the currency.
Elsewhere, the Swissie was also down against the euro, with EUR/CHF gaining 0.23% to hit 1.1425.
Later in the day, the U.S. was to publish a flurry of economic data, which will help traders gauge the strength of the U.S. economic recovery.
The country was to produce government reports on initial jobless claims, consumer price inflation, existing home sales, manufacturing activity in Philadelphia as well as a report on natural gas stockpiles.