- USD/CHF finds a minor pullback at around 0.9720 after plummeting from 0.9840.
- The Fed hikes its rates by 50 bps to tame the soaring inflation.
- Going forward, Swiss CPI and Unemployment Rate will remain in focus.
The USD/CHF pair has displayed an intense sell-off after failing to sustain above the resistance of 0.9840 as the rate hike announcement by the Federal Reserve (Fed) underpinned the positive market sentiment. The asset has plunged to near 0.9720 but is witnessing a minor pullback as profit-booking kicks in.
Potential selling pressure came after the Federal Reserve (Fed) dictated a rate hike by 50 basis points (bps) and its strategic planning to curb the inflation mess. The Fed has announced that the balance sheet reduction program will be initiated to tame the galloping inflation along with more jumbo rate hikes in the next policy meetings.
Inflation is skyrocketing and a restrictive policy is highly required for a prolonged period but what favors is the solid US economy that can absorb the shocks of price pressures. Also, the announcement that has delighted the market participants is the gradual approach to tightening the policy. The Fed has eliminated the hopes of a 75 bps rate hike by stating that the option is not into consideration.
On the Swiss front, the focus is on the release of the Consumer Price Index (CPI), which is due in the European session. The yearly Swiss CPI is seen at 2.5% against the prior print of 2.4%. Inflation in the Swiss area is advancing modestly but does not favor any hopes of a hawkish stance from the Swiss National Bank (SNB). Apart from that, Swiss agencies will also report the Unemployment Rate, which is expected to land at 2.2%, similar to its previous print.
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 retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.