All Eyes on Bernanke - USDCHF Watched Closely- Christopher Vecchio, Currency Analyst at DailyFX

"The past several hours have produced increased volatility across the board, though the clear winner today – simply because of a lack of data on the calendar and no commentary from key policymakers – is the Euro. Notably, the EURCHF hit Sf1.2600 for the first time since May 2011 after Swiss National Bank President Thomas Jordan said to reporters this morning that the SNB has not yet ruled out negative interest rates, and would not shy away from raising the EURCHF floor in the event of continued Franc strength (which has provoked low inflation over the past few years). While the USDCHF has rebound back towards the significant Sf 0.9750 level (resistance in May), further gains are in question today as Federal Reserve Chairman Ben Bernanke is set to testify in front of a congressional committee today at 10:00 EST/14:00 GMT. Although the stream of chatter out of the Fed has been quite neutral recently, most market participants are looking ahead down the road towards a day when the Fed is no longer easing at the torrid pace of $85B/month. In all likelihood, Chairman Bernanke sticks to the script today, the one that NY Fed President William Dudley was out touting this morning in an interview with Bloomberg News (he said that he and Bernanke were “in sync” on policy). That is: ‘the economy is improving, but isn't great yet; the labor market is steadily moving upwards, but isn't where it should be for us to withdraw stimulus; disinflation is setting in, but stronger consumption persists; and the payroll tax and ensuing budget sequestration have created quite the fiscal drag.' These are the same talking points from the Fed's May meeting, whose Minutes will be released today at 14:00 EST/18:00 GMT."