USD/CHF plunges to over 2.5-year lows

US dollar fell to its lowest point in over 2.5 years against the Swiss franc on Thursday, as speculation that the Federal Reserve will put off plans to taper its monetary stimulus was still causing pressure on the greenback.

USD/CHF plunged to a session low at 0.8903 at 10:15 GMT, also the pairs lowest point since January 2011, after which consolidation followed at 0.8912, down 0.14% for the day. Support was likely to be received at January 11th 2011 low, 0.8762, while resistance was to be encountered at October 23rd high, 0.8966.

The greenback was still under pressure after the disappointing US non-farm payrolls report, released on Tuesday, and in expectation of the vital series of economic data out of the United States, scheduled to be published later in the day, including initial jobless claims, trade balance, new home sales and the flash value of the manufacturing PMI. This data could probably urge the Federal Reserve Bank to maintain the current pace of its stimulus program until March next year, a survey of experts showed. The central bank, contrarily to expectations, abstained from reducing the scale of the 85 billion USD per month of asset purchases at its most recent policy meeting in September, as it wanted more evidence of economic recovery to be obtained.

Meanwhile, the franc was slightly higher against the euro, with EUR/CHF cross up 0.08% to trade at 1.2305 at 11:47 GMT. It became clear that manufacturing activity in the Euro zone as a whole, measured by the corresponding PMI, showed a slight improvement in October compared to September, as the index climbed to a preliminary value of 51.3 from the recorded final value of 51.1 last month. Analysts had anticipated a bit greater advance to 51.4.

In addition, GBP/CHF pair was losing 0.08% on a daily basis to trade at 1.4414 at 11:51 GMT. The Confederation of British Industry said earlier on Thursday that the gauge of industrial orders fell to -4 in October from +9 in September, while expectations pointed an advance to +10. The gauge of quarterly business optimism in the UK advanced to 24 from 7 during the three months through July, marking its highest level since April 2010, which suggested that economy has been in a process of revival since the beginning of this year.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, traded in a wide range ahead of US data points. After the release of the string of PMIs out of the Euro zone, the index climbed 0.3%, after trimming almost half of its earlier advance, and remained in the range 79.120 – 79.352.