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Swiss Franc Rises Amid Risk Aversion

The Swiss franc strengthened against the other major currencies in the European session on Tuesday amid risk aversion, as European stocks fell on falling commodity prices on the back of slowing growth in China and concerns over earnings report.

The U.K.'s FTSE 100 index is currently down 0.28 percent or 17.75 points at 6,334, France's CAC 40 index is down 0.68 percent or 32.13 points at 4,671 and Germany's DAX is down 0.38 percent or 38.20 points at 10,126.

Investors also looked ahead to the European Central Bank's monetary policy meeting due on Thursday for further direction. Most economists do not expect the ECB to increase the size of its asset purchase program, although the central bank may emphasize its readiness to make upward adjustments to the stimulus plan.

In other economic news, data from the Federal Customs Administration showed that the Swiss foreign trade surplus increased in the three months ended September. The trade surplus rose to CHF 9.420 billion in the third quarter from CHF 9.367 billion in the previous three-month period.

Exports fell by real 5.1 percent in the September quarter, reversing a 0.8 percent gain in the preceding quarter. Imports also dropped 2.5 percent, but slower than the 3.6 percent decrease in the June quarter.

In the Asian trading, the Swiss franc held steady against its major rivals.

In the European trading, the Swiss franc rose to more than 1-1/2-month high of 125.66 against the yen and a 4-day high of 1.0801 against the euro, from early lows of 124.87 and 1.0839, respectively. If the Swiss franc extends its uptrend, it is likely to find resistance around 128.00 against the yen and 1.07 against the euro.

Against the pound and the U.S. dollar, the franc edged up to 1.4726 and 0.9513 from early lows of 1.4803 and 0.9565, respectively. The franc may test resistance near 1.45 against the pound and 0.93 against the greenback.

Looking ahead, at 5:45 am ET, Bank of England MPC Member Ian McCafferty will deliver a speech about the evolution of financing conditions for businesses since the 2008 crisis and to what extent they are still hindering the economy, in London.

Fifteen minutes later, Bank of England Governor Mark Carney will testify on the Bank of England Bill before the Treasury Select Committee in London.

In the New York session, Canada wholesale sales data for August and U.S. housing starts and building permits, both for September, are slated for release.

At 9:00 am ET, Federal Reserve Bank of New York President William Dudley is expected to speak about "The Evolving Structure of the U.S. Treasury Market" in a conference hosted by the Federal Reserve Bank of New York. Federal Reserve Governor Jerome Powell will also deliver opening remarks at the same conference.

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Forex News

Major central banks, led by the U.S. Fed, dominated the economics scene this week with some delivering histroic shifts. In the U.S., the Fed was in focus as Chair Jerome Powell announced the latest policy decision and forward guidance. In Asia, all eyes were on the Bank of Japan as markets waited to see if the central bank would exit its ultra loose monetary policy. Find out how the Swiss central bank gave a surprise in Europe and learn what is the path ahead for U.K. interest rates.

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