USD/CHF climbs to near 0.8850 ahead of US Consumer Sentiment

USD/CHF strengthens as market sentiment suggests the Fed could prolong higher interest rates.
The uptrend in US Treasury yields has bolstered the US Dollar.
SNB’s Jordan has voiced concerns that the CHF has an adverse impact on Swiss businesses.

Akhtar Faruqui FXStreet

USD/CHF appreciates for the third consecutive day on Friday, advancing to around 0.8850 during the Asian trading hours. The strong Producer Price Index (PPI) data from the United States (US), has contributed to the strength of the USD/CHF pair.

Furthermore, the US Dollar Index (DXY) benefits from the hawkish sentiment surrounding the US Federal Reserve, contemplating maintaining its higher interest rates in response to persistent inflationary pressures. Additionally, US Treasury yields have risen for the past four consecutive sessions, lending further support to the US Dollar (USD), consequently, underpinning the USD/CHF pair.

The US Core Producer Price Index (PPI) remained stable with a 2.0% year-over-year increase in February, surpassing the expected 1.9%. The US PPI (YoY) recorded a 1.6% increase, exceeding both the anticipated 1.1% and the previous 1.0%. Furthermore, the Retail Sales Control Group showed improvement, reaching a flat 0.0% compared to the previous decline of 0.3%.

These recent economic indicators complicate the Federal Reserve's decision-making process regarding interest rate cuts. According to the CME FedWatch Tool, the likelihood of a rate cut in March currently stands at only 1.0%, dropping to 7.7% for May. The probabilities for rate cuts in June and July are relatively lower, at 59.0% and 79.4%, respectively.

In Switzerland, Producer and Import Prices decreased by 2.0% year-on-year in February 2024, showing a slight improvement from the previous month's 2.3% decline, which marked the sharpest drop since December 2020. This decline marks the tenth consecutive period of decrease. Monthly, prices increased by 0.1%, rebounding from a 0.5% fall in the previous month.

The Swiss Franc (CHF) faces challenges as the Swiss National Bank (SNB) adjusts its policy stance, no longer prioritizing a strong domestic currency. SNB Chairman Thomas Jordan has expressed concerns about the Swiss Franc's excessive strength, particularly its impact on Swiss businesses, especially exporters. These concerns are reflected in data from Switzerland's Foreign Exchange Reserves (CHFER), which show a recovery in Forex reserves.

(This story was corrected on March 15 at 11:21 GMT to say, in the first bullet point, that the pair is USD/CHF, not USD/CAD.)

USD/CHF

Overview
Today last price	0.8848
Today Daily Change	0.0011
Today Daily Change %	0.12
Today daily open	0.8837

Trends
Daily SMA20	0.8807
Daily SMA50	0.8715
Daily SMA100	0.8743
Daily SMA200	0.882

Levels
Previous Daily High	0.8841
Previous Daily Low	0.8782
Previous Weekly High	0.8866
Previous Weekly Low	0.873
Previous Monthly High	0.8886
Previous Monthly Low	0.8553
Daily Fibonacci 38.2%	0.8819
Daily Fibonacci 61.8%	0.8805
Daily Pivot Point S1	0.8799
Daily Pivot Point S2	0.8761
Daily Pivot Point S3	0.8741
Daily Pivot Point R1	0.8858
Daily Pivot Point R2	0.8879
Daily Pivot Point R3	0.8917

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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