Swiss Franc Rises Amid U.S.-Swiss Tariff Deal

(RTTNews) - The Swiss franc strengthened against other major currencies in the Asian session on Tuesday, after Switzerland negotiated a tariff agreement with the United States.

Switzerland was able to negotiate a reduction in U.S. tariffs from 39% during the Trump administration to 15%. A nation that had been subject to the highest tariff imposed on any developed economy now has much-needed respite thanks to the development.

The Swiss franc also rises as expectations grow that the Swiss National Bank (SNB) would maintain the policy rate at zero percent in December.

Recently, SNB Vice President Antoine Martin reiterated the forecast, stating that inflation is "expected to increase slightly."

Asian shares traded lower amid ongoing concerns about the market valuation, especially among technology shares, and the diminishing prospects of an interest rate cut by the U.S. Fed next month.

With U.S. government agencies back to business, markets are anticipating many pending and upcoming economic releases to get a glimpse on the state of economy and for clues on which way the Fed will decide on interest rates.

CME Group's FedWatch Tool is currently indicating only a 55.1 percent chance the Fed will leave rates unchanged next month and a 44.9 percent chance of another quarter point rate cut. In the Asian trading today, the Swiss franc rose to a 4-day high of 195.27 against the yen, from yesterday's closing value of 195.03. The franc may test resistance around the 197.00 region.

Against the euro and the pound, the franc advanced to 0.9209 and 1.0446 from Monday's closing quotes of 0.9228 and 1.0473, respectively. If the franc extends its uptrend, it is likely to find resistance around 0.91 against the euro and 1.03 against the pound.

The franc edged up to 0.7939 against the U.S. dollar, from an early low of 0.7967. On the upside, 0.76 is seen as the next resistance level for the franc.

Looking ahead, Canada housing starts for October, U.S. ADP weekly employment data, U.S. New York Fed services activity index for November, U.S. Redbook, U.S. factory orders for August and U.S. NAHB housing market index are slated for release in the New York session.