EUR/CHF up to 1.18

 Strong eurozone fundamentals and Swiss National Bank's ongoing aim to keep the Swiss franc away from investors' safe haven appetite will push EUR/CHF up to 1.18 in six months and to 1.20 at the end of 2018, says Rabobank. EUR/CHF is last down 0.1% at 1.1574. "The combination of strong growth, low rates and relatively stable politics in the eurozone means that from an investors' perspective this could be as good as it gets." This provides support for the euro and at the same time takes away some investor appetite for the Swiss franc. Moreover, low inflation in Switzerland means the SNB will likely continue its loose monetary policy, says Rabobank.

Canadian dollar

The Canadian dollar continues to show a lack of movement this week. In the Tuesday session, USD/CAD is trading at 1.2903, up 0.51% on the day. In economic news, Canadian GDP declined 0.1%, short of the estimate of +0.1%.  On the inflation front, the Raw Materials Price Index dropped 0.1%, missing the forecast of 0.4%. Later in the day, BoC Governor Stephen Poloz testifies before the House of Commons Standing Committee on Finance in Ottawa. In the US, today’s key event is CB Consumer Confidence, which is expected to climb to 121.1 points. Wednesday is a busy day, with the US releasing two key events – ADP Nonfarm Payrolls and ISM Manufacturing PMI. As well, the FOMC will release its monthly rate statement.
Canada’s economy contracted in August, surprising the markets, which had expected a small gain. The decline of 0.1% was the first drop since October 2016. The soft reading has pushed USD/CAD above the 1.29 line at the start of the North American session. The Canadian dollar is on the verge of dropping to a 10-week low,and has endured a miserable October, slipping some 3.5 percent.

Risks for USD/JPY are growing, Societe Generale says

Risks for USD/JPY are growing, Societe Generale says, given that Japanese economy is improving steadily and "the U.S. dollar is on a secular downtrend." Japan would rather have a weaker currency to improve its economy and drive inflation up, but since the economy is getting slightly better, SocGen sees potential for the yen. Prime Minister Shinzo Abe is likely to win the Sunday elections, but "Abenomics [which targets a weak yen] is losing its impact on the yen." USD/JPY is down 0.4% at 112.50. "USD/JPY has become a hostage to U.S. bond yields and Fed expectations," SocGen adds.

EUR/CHF rises 0.1% to a two-week high

EUR/CHF rises 0.1% to a two-week high of 1.1526 on Tuesday, according to Factset, as investors shrug off risks relating to the possibility of Catalan independence while concerns about the German election result diminish, Morgan Stanley says. It notes that German Chancellor Angela Merkel's CDU and CSU sister party have agreed on immigration policies and talks on forming a coalition with the FDP and the Greens are due to start next week. Morgan Stanley adds that EUR/CHF "should break higher with Spanish-Catalan tension de-escalating." Catalan President Carles Puigdemont is due to speak later on Tuesday and is expected to reveal his position on Catalonia's independence. EUR/CHF last up 0.1% at 1.1517

The Labor Department

The number of claims drawn by workers longer than a week rose 2,000 to 1.938 million in the week ended Sept. 23. Data on continuing claims are released with a one-week lag.
The Labor Department on Friday will release its September jobs report, which could also show hurricane-related distortions. Economists have predicted a modest 80,000 new nonfarm jobs and an unemployment rate steady at 4.4%. Puerto Rico and the Virgin Islands aren't counted in national employment data, though the storm-battered territories were included in Thursday's jobless-claims figures.

EUR/USD to rise to 1.1820

EUR/USD to rise to 1.1820 in the next 24 hours, potentially boosted by the European Central Bank minutes, which are due for release on Thursday. "ECB-watchers will be waiting for the minutes of the ECB Sep 7th meeting ... for signs as to what the ECB tapering plans may be on October 26th," it says, adding: "We slightly favour EUR/USD climbing back to the 1.1820 area over the next 24 hours." The ECB is expected to reduce the EUR60billion monthly total of bond purchases, but the question is by how much and when. The market is also looking at whether the central bank will set a deadline for its quantitative easing program. EUR/USD last up 0.2% at 1.1766.

Federal Reserve governor

Federal Reserve governor Jerome Powell and Commodity Futures Trading Commission Chairman J. Christopher Giancarlo, say they are confident regulators can come to an agreement on changing the Volcker rule ban on certain types of bank trading in the coming months. "We are going to be able to get to a five-agency rule on Volcker that is significantly less burdensome, that is faithful to the intent of Congress," Powell says. "But I'm not going to tell you that its going to be quick or easy."