- USD/CHF rebounds from the three-week low as the US Dollar attempts to snap the losing streak.
- Swiss Franc receives buying support due to its safe-haven status amid the Middle-East conflict.
- The probability of policy rate hikes fades due to the dovish remarks made by Fed officials.
USD/CHF extends its losing streak for the fifth successive day, trading lower around 0.9070 during the Asian session on Tuesday. However, the pair rebounds from the three-week low as the US Dollar (USD) attempts to halt the losing streak.
Moreover, the USD/CHF pair is facing downward pressure due to the Palestine-Israel military conflict as the Swiss Franc (CHF) receives buying support due to its safe-haven status.
Early on Saturday, Hamas initiated an assault on Israel using land, air, and sea forces. In retaliation, the Israeli army has commenced a forceful response in Gaza, marking the region's most intense military conflict to date.
The US Dollar Index (DXY) trades higher around 106.17 at the time of writing. However, the US Dollar (USD) didn’t appreciate the robust US Nonfarm Payrolls data released on Friday.
Additionally, the Greenback’s depreciation can be attributed to a decline in US Treasury yields on Monday, with the 10-year US Treasury bond yield standing at 4.66% as of the current press time.
Moreover, the remarks made by Federal Reserve (Fed) officials overnight prompted investors to downplay the probability of additional rate hikes, resulting in a further drop in US bond yields. Consequently, this development is perceived as eroding the strength of the Greenback.
Dallas Fed president Lori Logan suggested that there might be less necessity to raise the Fed funds rate, and Fed Vice Chair Philip Jefferson acknowledged the importance of the central bank proceeding cautiously with any additional increases in the policy rate.
The impending release of the FOMC meeting minutes on Wednesday is anticipated to influence expectations regarding the Federal Reserve's next policy move, potentially impacting demand for the Greenback.
In the absence of any major data in the Swiss calendar this week, the US Core Producer Price Index (PPI) on Wednesday will be eyed, followed by the Consumer Price Index (CPI) on Thursday, as these events play a crucial role in evaluating inflationary trends and economic conditions in the United States.
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 holds above 1.0800 ahead of Eurozone GDP, US inflation data
EUR/USD stays in positive territory above 1.0800 after registering its highest daily close in over a month on Tuesday. Investors await first-quarter GDP data from the Euro area and April Consumer Price Index data from the US.
GBP/USD closes in on 1.2600, all eyes on US CPI data
GBP/USD continues to stretch higher toward 1.2600 early Wednesday after closing in positive territory on Tuesday. The US Dollar struggles to find demand and allows the pair to hold its ground ahead of April CPI and Retail Sales report.
Gold consolidates gains near $2,360 as focus shifts to US CPI
Gold holds steady at around $2,360 in the early European session on Wednesday after gaining nearly 1% on Tuesday. The benchmark 10-year US Treasury bond yield stays in the red below 4.5% ahead of US inflation data, helping XAU/USD keep its footing.
Ethereum bears attempt to take lead following increased odds for a spot ETH ETF denial
Ethereum is indicating signs of a bearish move on Tuesday as it is largely trading horizontally. Its co-founder Vitalik Buterin has also proposed a new type of gas fee structure, while the chances of the SEC approving a spot ETH ETF decrease with every passing day.
US CPI data expected to show slow progress towards 2% target
The US Consumer Price Index is set to rise 3.4% YoY in April, following the 3.5% increase in March. Annual core CPI inflation is expected to edge lower to 3.6% in April. The inflation report could influence the timing of the Fed’s policy pivot.