Anna 
During European morning trade on Wednesday, USD/CHF exhibited relative stability, hovering around the 0.8540 level. The subdued performance of USD/CHF is attributed to increasing risk aversion, leading to heightened demand for safe-haven currencies, particularly the Swiss franc (CHF).
Concerns about the potential closure of the Strait of Gibraltar by Iran have contributed to rising risk aversion. However, doubts about the feasibility of such actions persist, and the return of major shipping companies to the Red Sea suggests a temporary normalization of the situation, aided by a multinational task force deployment in the area.
The Swiss National Bank (SNB) conveyed a proactive stance in its latest Quarterly Bulletin, expressing readiness to intervene actively in foreign exchange markets when deemed necessary. This signals a hawkish approach, highlighting the central bank’s commitment to managing currency dynamics and supporting the Swiss franc (CHF).
The U.S. dollar index (DXY) surpassed 101.50, while U.S. 2-year and 10-year bond yields were lower at 4.29% and 3.87%, respectively. The decline in yields contributed to the overall lackluster performance of the U.S. dollar (USD) in the market.
Former Dallas Fed President Robert Kaplan echoed the central bank’s cautious view, emphasizing the importance of learning from historical mistakes. Kaplan highlighted the Fed’s previous error of remaining too accommodative for too long, even as the economy improved. The central bank is currently exercising caution to avoid repeating such mistakes and striking a balance between accommodation and restriction.
Looking ahead, U.S. initial jobless claims and existing home sales data, scheduled for release on Thursday, are anticipated to offer valuable insights into the economic landscape. These indicators play a crucial role in assessing the health of the labor market and real estate industry, providing essential information for investors to evaluate overall economic conditions.
