Forex - USD/CHF edges higher but gains capped

Shutterstock photo - The U.S. dollar edged higher against the Swiss franc on Monday, but remained under pressure amid fresh uncertainty over the future of the Federal Reserve's bond-buying program.

USD/CHF hit 0.9128 during European morning trade, the session high; the pair subsequently consolidated at 0.9123, adding 0.16%.

The pair was likely to find support at 0.9090, the low of September 20 and a seven-month low and resistance at 0.9235, the high of August 28.

The dollar remained under pressure after the Fed last week said it wanted to see more evidence of a sustained economic recovery before it adjusted the scale of its bond buying program.

The decision surprised markets, which had been expecting the U.S. central bank to cut its USD85 billion-a-month stimulus program by USD10 billion to USD15 billion.

However, the greenback found some support after St. Louis Federal Reserve President James Bullard on Friday said the decision not to taper in September was "close" and indicated that there could be a small reduction in bond purchases in October.

In Switzerland, investors were eyeing comments by Swiss National Bank Chairman Thomas Jordan later in the day.

The Swissie was fractionally lower against the euro with EUR/CHF adding 0.07%, to hit 1.2323.

The euro came under pressure after data showed that manufacturing output in the euro zone was weaker than expected this month, but this was offset by an improvement in service sector activity.

The preliminary reading of the euro zone manufacturing purchasing managers' index fell to 51.1 in September from a final reading of 51.4 in August. Analysts had expected the index to inch up to 51.8.

However, the euro zone services PMI rose to 52.1, the highest level since June 2011, from 50.7 in August and above expectations for a reading of 51.1.

Separately, German Chancellor Angela Merkel's conservative party won general elections on Sunday, securing her a historic third term in office. Political party leaders were due to meet later Monday to discuss coalition talks. - offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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