USD/CHF sustains near 0.8950 after downbeat Swiss ZEW Survey Expectations

USD/CHF extends its gains for the second consecutive day, trading higher around 0.8950 during the Early European session on Wednesday. The pair strengthened driven by the positive Purchasing Managers Index (PMI) data from the United States, which provides support to the US Dollar (USD).

Swiss Franc (CHF) might be in for a bumpy ride with that ZEW Survey. A decline is recorded in expectations from 27.6 to 37.8 in October. The decline signals a worsening in Switzerland’s business conditions and labor market.

While the CHF, being a safe-haven currency, may have initially found support amid geopolitical tensions between Israel and Hamas, diplomatic efforts to ease these tensions have contributed to a reduction in market risk aversion. This, in turn, has boosted investors' risk appetite.

The US Dollar Index (DXY) mounted a comeback from its monthly lows, stabilizing around 106.30 at the time of writing, driven by the positive initial S&P Global PMI figures unveiled on Tuesday.

Nevertheless, the dip in US Treasury yields, holding at 4.82% by the press time, for the 10-year yield, might apply downward pressure on the US Dollar (USD).

In October, the US S&P Global Composite PMI displayed growth, climbing from 50.2 to 51.0. The Services PMI saw improvement, reaching 50.9, while the Manufacturing PMI rose to 50.0. This marks the first time in the last six months that manufacturing has sustained at or above the 50-point threshold, signaling a positive shift in that sector.

Investors are gearing up to closely monitor the US Q3 Gross Domestic Product (GDP) on Thursday, with additional attention on the US Core Personal Consumption Expenditures (PCE) data set for Friday.