US dollar was almost unchanged against the Swiss franc on trading Wednesday, as market players used caution making decisions how to position themselves ahead of the outcome of the FOMC meeting on policy.
USD/CHF touched a session high at 0.9267 at 11:00 GMT, after which consolidation followed at 0.9260, ticking up a mere 0.01% for the day. Support was to be received at August 28th low, 0.9171, while resistance was to be encountered at September 12th high, 0.9336.
Investors were expecting the outcome of Federal Reserve Bank’s two-day policy meeting. The Federal Open Market Committee (FOMC) might decrease Treasury purchases to 40 billion USD and continue to buy 40 billion USD of mortgage backed securities, according to the median estimates of experts participated in a survey by Bloomberg. Federal Reserve policymakers have pledged to maintain the benchmark interest rate at levels close to zero at least as long as unemployment rate exceeds 6.5% and the inflation outlook is no more than 2.5%.
In the mean time, confidence among Swiss investors increased in September, after Switzerlands largest trading partner, the Euro zone, has exited the long recessionary period during the second quarter of the year. The ZEW economic sentiment index, gauging expectations during the next six months, advanced to 16.3 in September from 7.2 in August, marking its highest point since April.
Elsewhere, the Swiss franc was almost unchanged against the euro, with EUR/CHF cross gaining 0.02% for the day to trade at 1.2374 at 11:50 GMT. Earlier today it became clear that activity in the sector of construction in the common currency bloc rose for the fourth consecutive month in July, advancing 0.3% on a monthly basis. Construction output, however, dropped by 1.2% in July annually. Construction activity in Germany expanded by 2.7% in July on a monthly basis, while in Spain it declined by 1.6% during the same period. These results implied an unfolding economic recovery, but if we take the sharp drop in industrial output in the euro region during July, reported last week, the strength and stability of recovery might appear to be uncertain. Last but not least, GBP/CHF pair was gaining 0.45% today to trade at 1.4795 at 12:05 GMT.
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