The Swiss franc declined against most major rivals in pre-European deals on Wednesday, as sentiment improved after China service sector activity rose to a 3-month high in October, reducing the demand for safe-haven currency.
Survey from Markit showed that the Caixin/Markit Purchasing Managers’ Index for services rose to 52 in October from a 14-month low of 50.5 in September.
Investors focus on PMI reports from major European economies, as well as Eurozone producer price data, the U.S. ADP employment figures and ISM report on U.S. services sector for further direction. Traders also await speeches by ECB President Mario Draghi and Fed Chair Janet Yellen for further clues about the monetary policy outlook.
While speaking to Geneva Financial Center on Tuesday, the Swiss National Bank President Thomas Jordan vowed that the franc remains “significantly” overvalued, and the bank is ready to “intervene on the foreign exchange market as required.”
The SNB’s negative interest rate on sight deposits are fundamental pillar of current monetary policy measures, and they are aimed to guarantee long-term macroeconomic stability under the current circumstances, he told.
The currency has been trading lower against most major rivals in Asian deals, as Asian markets rose on the back of positive China data.
In pre-European deals, the franc fell to a 6-day low of 0.9928 against the dollar, 2-day lows of 121.94 versus the yen and 1.5309 against the pound, compared to Tuesday’s closing values of 0.9901, 122.06 and 1.5263, respectively. The franc may possibly locate support around 1.01 against the greenback, 120.00 against the yen and 1.55 against the pound.
On the flip side, the franc climbed to a 6-day high of 1.0839 against the euro, coming off from a low of 1.0868 hit 5:00 pm ET. The next possible resistance for the franc is seen around the 1.075 region. The pair was worth 1.0856 when it ended Tuesday’s trading.
Looking ahead, PMI reports from major European economies for October and Eurozone PPI for September, are due to be released in the European session.
At 5:30 am ET, Federal Reserve Governor Lael Brainard will participate in a panel discussion at the European Central Bank in Frankfurt.
In the New York session, U.S. private sector jobs data for October, trade data for September, the ISM U.S. non-manufacturing PMI for October, U.S. weekly Crude oil inventory data and Canada trade data for September are slated for release.
At 8:00 am ET, Federal Reserve Bank of Philadelphia President Patrick Harker is expected to speak on “Why Pay for Success: The Need for New Sources of Social Innovation Capital” before the “Capital for Communities: Pay for Success Financing” event in Philadelphia.
At 10:00 am ET, Federal Reserve Chair Janet Yellen will testify on bank regulation before the House Financial Services Committee in Washington DC.
At 2:30 pm ET, Federal Reserve Bank of New York President William Dudley is expected to speak about the economy in New York.
The material has been provided by InstaForex Company – www.instaforex.com