US Dollar strength pushes Swiss Franc lower amid mixed economic signals

The Swiss Franc (CHF) weakened slightly on Monday as the US Dollar (USD) continued to hold near its yearly high, despite mixed economic data from the US. The USD/CHF pair edged higher, ending a two-day losing streak, with the USD benefiting from a sharp decline in the Euro (EUR). The Greenback reached a fresh year-to-date high, supported by safe-haven demand and elevated US Treasury yields.

The EUR/USD pair fell to its lowest level in over a year, driven by concerns over France's public finances and political instability in Europe. Meanwhile, the US Dollar Index (DXY) held near 102.32, reflecting the Greenback's strength against a basket of major currencies.

Recent business activity data showed resilience in the US economy. The final S&P Global Services Purchasing Managers’ Index (PMI) was revised higher to 58.8 in September, while the ISM Services PMI eased to 54.9. Both figures remained above the 50 mark, indicating expansion. However, traders scaled back expectations of a Fed rate hike in October following weaker-than-expected US employment data.

Despite the softer Fed rate-hike expectations, persistent inflation risks and higher US Treasury yields continued to support the USD. The 10-year Treasury yield held near 5.30%, just below last week’s peak of 5.34%. The Swiss Franc found some support as a safe-haven currency, but its low interest rates and the Swiss National Bank’s readiness to intervene in the currency market posed challenges.