Swiss Franc Falls Despite Surprising Economic Growth

The Swiss Franc (CHF) is on the defensive against the US Dollar (USD), despite a boost from the KOF Leading Indicators data. The USD/CHF has been reversing some of its losses from Wednesday, when investors were spooked by escalating tensions in the Middle East and the lack of guidance from Federal Reserve Chairman Kevin Warsh's press conference.

The Economic Barometer, released by the Swiss KOF Economic Institute on Thursday, showed an unexpected improvement to 103.5 in July, from 102.1 in June. Analysts had expected a decline to 101.0. The report points to improvements in production indicators as the main contributors to this month's rise.

However, the Fed's decision to keep interest rates unchanged, despite three committee members voting for a rate hike, has shaken investor confidence. MUFG analysts warn that 'the US dollar outlook has certainly worsened' due to the lack of forward guidance from Chairman Warsh.