There could be a run into the Swiss franc if there is a lot of fear, but keep in mind that there's also an interest rate differential that favors the United States, despite the fact that the Federal Reserve may cut. After all, the interest rate differential is still pretty wide, and the Swiss National Bank has already cut. However, keep in mind that demand for the Swiss franc picks up in times of geopolitical uncertainty, which we certainly have at the moment, and then economic uncertainty.

The Franc Also Watches Europe

This is also driven not only from the United States, but from the European Union. So, in a way you need to pay attention to the Euro against the Swiss Franc just as much in general. This is a situation where I think we are going to continue to go sideways for a moment and then have to determine whether or not we could see some type of base building exercise and a shot higher, or do we break down?

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Underneath current levels, the 0.84 level has been important on long-term charts, so you must keep that in the back of your head as a potential floor in the market. But overall, I do think that we are going to have very choppy and difficult conditions going forward. I think the shot across the bow a couple of weeks ago really was just the first act, and therefore, we will continue to see longer-term volatility. Eventually, the demand for the U.S. dollar will probably pick up based on fear, but I don't know that it will be felt as strongly here.

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