- USD/CHF consolidates post-intraday gains on improved US bond yields.
- Improved market sentiment weighs on the Swiss Franc (CHF).
- Minneapolis Fed President Neel Kashkari's comments propel Greenback's upward momentum.
USD/CHF retraces recent losses, trading higher around 0.9020 during the European session on Wednesday. The pair receives upward support due to the rebound in the US Dollar (USD) on the back of improved US Treasury yields.
On Tuesday, Switzerland's seasonally adjusted Unemployment Rate (MoM) remained consistent at 2.1% in October. Additionally, the conflict between Israel and Hamas initially influenced the USD/CHF pair, with capital possibly moving towards the safe-haven CHF. However, the situation in the Middle East is now contained, improving market sentiment and potentially prompting a capital shift from the Swiss Franc to riskier assets.
Market speculation is swirling around the possibility of the US Federal Reserve (Fed) halting interest rate hikes. This sentiment is fueled by the recent disappointing Non-Farm Payrolls data and the dovish stance taken by the Fed in November. However, the US Dollar (USD) is gaining strength as Treasury yields recover from previous losses, with the 10-year US bond yield currently at 4.60%.
The Greenback's upward momentum received a boost after comments from Minneapolis Fed President Neel Kashkari, who cautioned against prematurely declaring the end of the Fed's rate hike cycle. Kashkari expressed doubts about the adequacy of current policy in the face of a robust economy, suggesting that a potential rise in inflation could warrant additional tightening.
Furthermore, Chicago Fed President Austan Goolsbee acknowledged progress in managing inflation and hinted at a shift in focus towards determining the duration for which interest rates should be maintained at their current level.
Investors are eagerly awaiting further insights into the potential trajectory of interest rates, with Fed Chairman Jerome Powell set to speak at a conference in Washington, DC, hosted by the Division of Research and Statistics.
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 nears 1.0800 on broad US Dollar weakness
Optimism continues to undermine demand for the American currency ahead of the weekly close. EUR/USD hovers around weekly highs just ahead of the 1.0900 figure.
GBP/USD reconquers 1.2500 with upbeat UK GDP
Following BOE-inspired slump on Thursday, the British Pound changed course and trades around 1.2530. Better-than-anticipated UK GDP and a weaker USD behind the advance.
Gold resumes advance and trades above $2,370
XAU/USD accelerated its recovery on Friday, as investors drop the USD. Dismal US employment-related figures revived hopes for a soon-to-come rate cut from the Fed.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Euro area annual inflation is expected to be 2.4% in April 2024
Euro area annual inflation is expected to be 2.4% in April 2024, stable compared to March. Looking at the main components of euro area inflation, services is expected to have the highest annual rate in April.