- USD/CHF struggles to extend recovery from six-week low, eases from intraday high of late.
- Market sentiment dwindles amid mixed concerns over SVB fallout, Fed.
- Treasury bond yields defend the previous day’s rebound, US stock futures print mild losses.
USD/CHF reverses from the intraday high to 0.9140 as it fades the previous day’s recovery from a six-week low during early Wednesday. Even so, the Swiss Franc (CHF) pair remains indecisive on a day while tracing the sluggish markets amid mixed clues.
Recently increasing calls of the Fed’s 0.25% rate hike, versus fears of no move due to the challenges for the US banks emanating from the fallouts of the Silicon Valley Bank (SVB) and Signature Bank, seem to underpin the US Dollar’s run-up even as the inflation data eased. Also supporting the greenback could be the latest recovery in the US Treasury bond yields.
That said, US Dollar Index (DXY) picks up bids bid to refresh the intraday high near 103.75 during the two-day rebound from a one-month low. It should be noted that the US 10-year Treasury bond yields grind near 3.68% by the press time, after posting the biggest daily gain in five weeks the previous day, while the two-year bond coupons extend the previous day’s recovery from the six-month low to 4.31% at the latest.
On Tuesday, the US Consumer Price Index (CPI) and CPI ex Food and Energy both matched 6.0% and 5.5% YoY market forecasts, versus 6.4% and 5.6% respective previous readings. It should be noted that the market consensus of 0.4% MoM for the CPI, versus 0.5% prior, also proved right but the CPI ex Food & Energy rose to 0.5% compared to 0.4% analysts’ estimates and prior. “The Federal Reserve is seen raising its benchmark rate a quarter of a percentage point next week and again in May, as a government report showed U.S. inflation remained high in February, and concerns of a long-lasting banking crisis eased,” said Reuters following the US inflation data release.
Elsewhere, Swiss Producer and Import Prices eased in February to -0.2% MoM versus -0.1% expected and 0.7% prior.
While talking about the SVB risk, US Senate Banking Committee Chairman Sherrod Brown and Federal Reserve Governor Michelle Bowman ruled out chatters suggesting the grim conditions of the US banking industry. On the contrary, Wall Street Journal (WSJ) reported that a raft of tougher capital and liquidity requirements are under review, as well as steps to beef up annual “stress tests” that assess banks’ ability to weather a hypothetical recession, according to a person familiar with the latest thinking among U.S. regulators. “The rules could target firms with between $100 billion to $250 billion in assets, which at present escape some of the toughest requirements,” per WSJ.
Hence, the market’s indecision challenges the USD/CHF buyers even as the US Dollar manages to defend the previous day’s gains ahead of the key US data. That said, today’s US Retail Sales for February, expected -0.3% MoM versus 3.0% prior, will be important to watch as the hawkish bets on the Federal Reserve’s (Fed) 25 basis points (bps) rate hike in the next week’s Federal Open Market Committee (FOMC) improve lately.
Technical analysis
USD/CHF is likely to refresh 2023 low, currently near 0.9060 unless rising back beyond the support-turned-resistance line from early February, around 0.9345 by the press time.
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 tests daily lows near 1.0350 on NFP
The buying bias in the Greenback gathers extra pace on Friday after the US economy created fewer jobs than initially estimated in January, dragging EUR/USD to the area of new lows near 1.0350.

GBP/USD flirts with daily lows near 1.2420, Dollar picks up pace
The continuation of the rebound in the US Dollar motivates GBP/USD to accelerates its losses and revisit the 1.2420 area, or daily lows, following the release of US NFP in January.

Gold tests fresh lows near $2,860 after NFP
Gold prices trim their early advance on Friday, deflating to the vicinity of the $2,860 region per ounce troy following the publication of the US labour market report in January.

Key takeaways from the January Payrolls report
The January payrolls number was weaker than expected at 143k, vs a reading of 175k. However, to counteract the downside surprise in the NFP number, the unemployment rate fell to 4% from 4.1%, and average wage data jumped by 0.5% on the month, to 4.1%, the market had been looking for a decline to 3.8%.

Top Trumps: The global economy’s House of Cards
The year has barely started and we are learning the hard way what Donald Trump’s second term in office means for markets, analysts and global policymakers. It's like living through an episode of the political thriller, House of Cards.

The Best Brokers of the Year
SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.