Swiss Franc Falls Amid Risk Appetite

The Swiss franc drifted lower against its major counterparts in European trading on Tuesday amid risk appetite, with higher metal prices, encouraging reading on German business sentiment and strong earnings updates from Randstad and Orange supporting underlying sentiment.

Survey data from Ifo institute showed that German business sentiment rose to the highest level in more than two years in October. The Ifo business confidence index rose to 110.5 from 109.5 in the prior month. The expected reading was 109.

Oil prices climbed after Russian Energy Minister Alexander Novak emphasized that there is an urgent need to rebalance the oil market.

Investors focus on speeches from Atlanta Fed President Dennis Lockhart, Bank of England Governor Mark Carney and European Central Bank President Mario Draghi for further clues as to the future direction of monetary policy.

Speaking about monetary policy at the University of Basel on Monday, the Swiss National Bank President Thomas Jordan said that the negative interest rate policy is fundamentally effective, given the overvaluation of the franc and the globally low level of interest rates.

The central bank has manoeuvre to take rate into further negative territory, if found necessary, he added.

The franc showed mixed performance in the Asian session. While the franc rose against the yen, it held steady against the greenback, pound and the euro.

The franc weakened to a 7-1/2-month low of 0.9997 against the greenback, from Monday's closing value of 0.9934. Continuation of the franc's downtrend may lead it to a support around the 1.02 zone.

The Swiss franc slipped to 1.2215 against the pound, its weakest since October 7. The Swiss franc is seen finding support around the 1.28 region.

The franc declined to a 5-day low of 1.0864 against the euro, off its Asian session's high of 1.0805. The franc is poised to test support near the 1.10 area.

Pulling away from its recent 5-day high of 105.17 against the Japanese yen, the franc dropped to 104.59. Further weakness may take the franc to a support around the 103.00 mark.

Looking ahead, U.S. FHFA house price index for August, U.S. S&P Case-Shiller house price index for August and U.S. consumer confidence index for October are slated for release in the New York session.

At 10:35 am ET, Bank of England Governor Mark Carney is scheduled to testify about the economic consequences of the Brexit Vote before the House of Lords Economic Affairs Committee, in London.

At 11:30 am ET, European Central Bank President Mario Draghi is expected to speak about stability, equity, and monetary policy at the German Institute for Economic Research, in Berlin.

At 1:20 pm ET, Atlanta Fed President Dennis Lockhart is expected to speak to the Opportunity Finance Network about "Lending and Investing in Community Development" in Atlanta.