US dollar advanced to its highest point in eight trade sessions against the Swiss franc on Wednesday, as a White House official said that US President Barack Obama will nominate Fed Vice Chairman Janet Yellen as the next Chairman of the bank, while this news reduce demand for haven assets, such as the franc.
USD/CHF rose to a session high at 0.9109 at 9:10 GMT, also the pairs highest point since September 27th, after which consolidation followed at 0.9101, rising 0.69% for the day. Support was likely to be found at October 4th low, 0.8978, while resistance was to be met at September 27th high, 0.9111.
The US dollar received certain support after it became clear that Federal Reserve Bank Vice Chairman Janet Yellen would probably succeed current Chairman Ben Bernanke, whose term ends on January 31st. She was also the favorite candidate, as shown in surveys of economists and had the support of 20 members of the Senate Democratic caucus, who signed a July 26th letter to President Barack Obama. Yellen has been known as one of the upholders of the unprecedented monetary stimulus program. If she is confirmed as the next Chairman, under her leadership Fed’s monetary policy may remain accommodative for a more extended period.
Meanwhile, Swiss National Bank (SNB) President Thomas Jordan said that the bank did not have to intervene in currency markets to protect its ceiling on EUR/CHF pair for more than one year, which implied that the measure remains in place if needed. “Despite recent turbulence on foreign-exchange markets in emerging economies, the Swiss franc has settled against the euro since September 2012 at slightly above the minimum exchange rate of 1.20”, Jordan said in Washington on Tuesday, cited by Bloomberg. The Zurich-based SNB imposed the cap in September 2011, after the franc almost reached a parity with the common currency.
The franc was lower against the euro, with EUR/CHF cross advancing 0.32% on a daily basis to trade at 1.2310 at 11:58 GMT. A report showed earlier that German industrial production rose more than projected in August, which eased concerns that the debt crisis in the Euro zone has caused a negative impact on regions largest economy. Industrial output increased 1.4% in August on a monthly basis, exceeding expectations of a 0.9% gain. Julys result has been revised to a 1.1% drop from a 1.7% drop previously. GBP/CHF pair was little changed, gaining 0.07% to trade at 1.4551.