CHF Rises Versus GBP and Euro, As the Dollar Remains Volatile

Today, the CHF is rising noticeably, although the selling focus has turned from the Euro to GBP. Nonetheless, the CHF is outperformed by the NZD, which is by far the most powerful. The Yen, on the other hand, is weaker as a result of extended risk-on sentiment from Japan to Europe. The second-weakest currency is the pound sterling. The dollar is combined with the Canadian dollar.

In October, the UK PMI Manufacturing was finalized at 57.8, up from 57.1 in September. Nonetheless, this is the first increase in five months. Despite a dip in new export work, new order growth moved higher, according to the market. However, selling prices increased at an unprecedented rate.

“Stressed global supply networks are disturbing production plans, while staff shortages and diminishing intakes of new export work are also stymieing the upturn,” said Rob Dobson, Director at IHS Markit. This low-growth environment is accompanied by a sharp increase in inflationary pressures, with manufacturers reporting near-record increases in input costs as well as record increases in selling prices.”

After some unusual activity this week, the Fed will announce tapering this week, the Bank of England may raise rates, and the RBA may offer a less dovish perspective on the outlook. And that’s just the beginning, with other central banks following suit and preparing to do even more in the coming year as inflation remains uncomfortably high.

GBP, CHF Limited Amid Escalating UK/France “Fishing Row”

The dullness with which GBP/USD is trading right now – the pair isn’t showing much desire to challenge its 21-day moving average at 1.3694, the psychological 1.3700 level, or resistance in the form of the 18 and 27 October lows around 1.3710 – could be a reflection of worries about UK/France and EU relations.

Indeed, the rapidly escalating “fishing row” between the UK and France appears to have no end in sight, with the latter threatening to impose cross-channel trade restrictions and new restrictions on UK fishing boats in French waters if the UK does not grant more licenses to the French fishing industry.

On the first day of a new week, the USDCHF found some new supply and has now reversed a large portion of Friday’s comeback gains from the 0.9100 mark or two-month lows. Following an early advance to the highest level since October 13, the US dollar experienced a minor intraday drop. As a result, the USDCHF pair came under some pressure, albeit several factors might assist limit any losses.