Swiss franc sinks as hopes for progress in the U.S.-China trade dispute fuelled a recovery in investors’ appetite for risk.
Traders’ appetite for risk, which pulled Swiss franc to two-month lows, weighed on safe-haven currencies. The Swiss franc tends to appreciate during bouts of economic uncertainty. Some of its sharpest losses were against traditionally high-yielding currencies such as the Australian dollar. The swissie sank against the aussie 0.7%.
Banks have touted a short position against the franc as a top bet in 2019. Switzerland’s central bank is likely to lag its eurozone counterpart in tightening monetary policy and won’t tolerate rapid franc gains.
Investors shifted their focus to President Donald Trump’s State of the Union address at 0200 GMT Wednesday. He will likely stir contention with remarks on progress in U.S.-China trade talks. The dollar held on to recent gains ahead of the speech.
START TRADINGForex – Commodities – Swiss franc sinks to a 10-week low
Currency trading was fairly subdued due to many markets in Asia being closed for Lunar New Year holidays.
The Australian dollar rose sharply, reversing earlier losses, after the Reserve Bank of Australia (RBA) held rates at record lows. At its first meeting of the year RBA sounded less dovish than expected. The Aussie was last up 0.3% at $0.7247.
The euro was 0.2% weaker at $1.1417, off a three-week high of $1.15145 set on Thursday.
Sterling fell after a survey showed firms in Britain’s dominant services sector reporting job cuts for the first time in six years amid uncertainty over the progress of Brexit negotiations.
The pound was down 0.3% at $1.3003. A Bank of England meeting on Thursday is not expected to provide much clarity on the course of interest rates.
China’s financial markets are closed all week for the Lunar New Year holiday. Other Asian markets are also closed for parts of the week, keeping wider market activity subdued.
Sources: Reuters, Investing, CNN money
PLEASE NOTE The information above is not investment advice.