USD/CHF rises to four-month high near 0.9050 ahead of US economic figures
|- USD/CHF appreciates due to risk aversion ahead of key data from the United States.
- The decline in the US Treasury yields could limit the advance of the US Dollar.
- Swiss Franc has depreciated as a result of contrasting monetary policies between the SNB and the Fed.
USD/CHF moves in the positive direction, driven by a stronger US Dollar (USD), possibly influenced by a risk-off sentiment. This sentiment is fueled by anticipation surrounding the upcoming release of the US Gross Domestic Product Annualized on Thursday and Personal Consumption Expenditures (PCE) scheduled for Friday. As a result, the USD/CHF pair rises to a four-month high near 0.9050 during the early European hours on Wednesday.
However, the decline in US Treasury yields may be attributed to expectations surrounding the US Federal Reserve (Fed) considering potential rate cuts in June. This sentiment could potentially limit the advances of the US Dollar, subsequently putting pressure on the USD/CHF pair.
The Swiss Franc (CHF) has depreciated due to differing monetary policies between the Swiss National Bank (SNB) and the Federal Reserve. In its March meeting, the SNB surprised markets by lowering its benchmark interest rate by 25 basis points to 1.5%, marking the first rate cut among major central banks since the onset of global disinflation in 2023. After the announcement, the CHF extended its year-to-date weakness. Being the first G10 central bank to cut is likely to undermine the currency.
The Swiss Franc could have gained strength due to risk aversion triggered by the European Union's (EU) launch of investigations into major tech firms such as Apple, Google, and Meta on Monday. Additionally, escalating geopolitical tensions between Ukraine and Russia may lead investors to seek refuge in safe-haven currencies like the CHF.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.