- USD/CHF fades bounce off one-week low ahead of Swiss National Bank Monetary Policy announcements.
- Fed’s dovish rate hike drown US Dollar even as Chairman Powell, US Treasury Secretary Yellen offered corrective bounce afterward.
- SNB is likely to announce 0.50% rate hike but Monetary Policy Assessment will be crucial to watch amid banking crisis.
USD/CHF retreats to 0.9173, following the Federal Reserve (Fed) induced slump to one-week low, as traders prepare for the Swiss National Bank (SNB) announcements during early Thursday.
On Wednesday, US Federal Reserve (Fed) matched market forecasts and announced 0.25% rate hike but failed to propel the US Dollar as the Fed statement mentioned “some additional policy firming may be appropriate,” instead of “ongoing increases in the target range will be appropriate”. Fed Chair Jerome Powell, however, tried to tame the rate cut hopes by saying that officials do not see rate cuts for this year, which in turn allowed breathing space to the greenback bears in the last.
Apart from the Fed announcements, US Treasury Secretary Janet Yellen’s comments also allowed the US Dollar Index to rebound from a seven-week low, by way of challenging the risk appetite, as she ruled out considering “blanket insurance” for bank deposits.
Against this backdrop, Wall Street closed in the red but yields and the US Dollar Index (DXY) both closed in the red.
Looking ahead, the Swiss National Bank’s (SNB) Interest Rate Decision is the key for the USD/CHF pair traders to watch as the bank is likely to announce a dovish hike considering the latest banking sector fallouts, mainly surrounding Credit Suisse. Should the SNB accepts challenges to the economic outlook from the latest banking sector turmoil, the USD/CHF may pay recent losses.
Apart from the SNB, the second-tier US data relating to activities and jobs will also be important to watch for clear directions.
Technical analysis
A sustained break of the 50-DMA, around 0.9255 by the press time, directs USD/CHF towards the 0.9100 threshold but multiple lows marked near 0.9085 and 0.9070 can probe the bears afterward.
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
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.