USD/CHF hovers around 0.8400 after dropping to an all-time low, US data eyed

USD/CHF loses ground as the Fed is expected to lower interest rates in early 2024.
The demand for the Swiss Franc is heightened on risk aversion due to the Middle-East conflict.
CME Fedwatch tool indicated that markets are pricing in the probability of a Fed rate cut in March and in May.

Akhtar Faruqui FXStreet

USD/CHF posted an all-time low at 0.8394 during the Asian trading hours on Thursday, trading around 0.8400 at the time of writing. The USD/CHF faces challenges due to the weaker US Dollar (USD). The escalated geopolitical situation in the Middle East is fostering risk aversion, leading to an increase in demand for the safe-haven Swiss Franc (CHF).

Investors seek refuge in assets like the CHF during times of heightened geopolitical tensions. Concerns are particularly centered around the potential closure of the Gibraltar Strait by Iran, adding to the geopolitical uncertainties. However, major shipping firms have begun to return to the Red Sea, indicating a tentative normalization in the region.

According to the CME Fedwatch tool, markets are pricing in a probability of more than 88% for a rate cut in March and a full pricing in of a rate cut in May. These figures indicate the prevailing expectations among investors for potential monetary policy easing by the Federal Reserve (Fed).

Additionally, the softer US Core Personal Consumption Expenditures (PCE) – inflation further reinforces the belief that the Federal Reserve may contemplate easing its monetary stance to address economic conditions. On Wednesday, the US Richmond Fed Manufacturing Index experienced a notable decrease of 11 points in December, contrary to the expected decrease of 7 points and a 5-point decrease in November.

Investors are anticipated to focus on Thursday's releases of Initial Jobless Claims and Pending Home Sales from the United States, which could offer additional insights into the labor market and the real estate sector, respectively.

USD/CHF: additional important levels

Overview
Today last price	0.8402
Today Daily Change	-0.0024
Today Daily Change %	-0.28
Today daily open	0.8426

Trends
Daily SMA20	0.8671
Daily SMA50	0.8829
Daily SMA100	0.8891
Daily SMA200	0.8911

Levels
Previous Daily High	0.8549
Previous Daily Low	0.8409
Previous Weekly High	0.8712
Previous Weekly Low	0.8514
Previous Monthly High	0.9113
Previous Monthly Low	0.8685
Daily Fibonacci 38.2%	0.8462
Daily Fibonacci 61.8%	0.8496
Daily Pivot Point S1	0.8374
Daily Pivot Point S2	0.8321
Daily Pivot Point S3	0.8233
Daily Pivot Point R1	0.8514
Daily Pivot Point R2	0.8602
Daily Pivot Point R3	0.8655

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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