- USD/CHF trades softer near 0.9050 in Tuesday’s early European session.
- Fed’s Kashkari said if inflation continues to stall, no rate cuts would be a possible scenario.
- The rising Middle East geopolitical tensions might boost safe-haven flows, benefiting the CHF.
The USD/CHF pair trades on a weaker note around 0.9050 during the early European session on Tuesday. The downtick of the pair is backed by the weaker US Dollar (USD). Nonetheless, the upbeat US March employment report and the hawkish comments from the Federal Reserve (Fed) officials might cap the downside of the USD/CHF pair.
The US employment report for March showed that the economy added more jobs than expected, prompting speculation that the Fed might delay the easing cycle. The odds of a June rate cut declined to below 50% from a week earlier around 57%, according to the CME’s FedWatch tool.
The Fed Chair Jerome Powell stated that the central bank could cut rates if the US economy continued on its current course. Meanwhile, Fed Governor Michelle Bowman said last week that the Fed might need to act further to ease price pressures. Minneapolis Fed President Neel Kashkari noted that he penciled in two interest rate cuts this year but if inflation continues to stall, no rate cuts would be a possible scenario. Investors will take more cues from the US Consumer Price Index (CPI) data for March, due on Wednesday. The firmer-than-expected reading could lower expectations for Fed rate cuts in June and lift the US Dollar (USD), while softer reading could spur speculation about rate cuts.
On the Swiss front, the likelihood of an immediate ceasefire between Israel and Hamas remained gloomy, as the two sides had failed to reach an agreement despite repeated attempts by the US and its allies to help negotiate peace. Additionally, the top Iranian military advisor warned that none of the Israeli diplomatic missions are safe anymore after this week’s attack on the Iranian Consulate in Syria, per, Anadolu Agency reports. The escalating tensions surrounding geopolitical tensions in the Middle East could boost safe-haven assets like the Swiss Franc (CHF) and create a headwind for the USD/CHF pair.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds steadily as traders anticipate Australian Retail Sales, Fed’s decision
The Aussie Dollar registered solid gains against the US Dollar on Monday, edged up by 0.55% on an improvement in risk appetite, while the Greenback was crushed by Japanese authorities' intervention. As Tuesday’s Asian session begins, the AUD/USD trades at 0.6564.
EUR/USD finds support near 1.0720 after slow grind on Monday
EUR/USD jostled on Monday, settling near 1.0720 after churning in a tight but lopsided range as markets settled in for the wait US Fed outing. Investors broadly expect US rates to hold steady this week, but traders will look for an uptick in Fed guidance for when rate cuts could be coming.
Gold prices soften as traders gear up for Fed monetary policy decision
Gold price snaps two days of gains, yet it remains within familiar levels, with traders bracing for the US Fed's monetary policy decision on May 1. The XAU/USD retreats below the daily open and trades at $2,334, down 0.11%, courtesy of an improvement in risk appetite.
Will Bitcoin ignore major macro market developments this week?
Bitcoin price will be an interesting watch this week, with increased volatility expected amid crucial events lined up in the macro market. On Tuesday, Hong Kong will be debuting its BTC and ETH ETFs while the next day will see FOMC minutes make headlines.
Gearing up for a busy week: It typically doesn’t get any bigger than this
Attention this week is fixated on the Federal Reserve's policy announcement scheduled for Wednesday. While the US central bank is widely expected to remain on hold, traders will be eager to discern any signals from the Fed regarding the possibility of future interest-rate cuts.