USD/CHF turns sideways to 1.0020 as DXY steadies, Fed’s Powell warns more 50 bps rate hikes

The USD/CHF pair is witnessing a time correction as momentum oscillators have turned extremely overbought on the lower timeframe. The pair is displaying back and forth moves in a narrow range of 1.0024-1.0035 in the Asian session. For the greenback bulls, sustainability above the psychological support of 1.0000 will be healthy going forward.

The pair have remained in the fist of the greenback bulls on the advancing US dollar index (DXY). The DXY is gaining sharply on upbeat economic data. The outperformance of the US Nonfarm Payrolls (NFP) and above-expectation release of the US Consumer Price Index (CPI) and Producer Price Index (PPI) have bolstered the odds of more jumbo rate hikes by the Federal Reserve (Fed) this year.

In the Asian session, the DXY is experiencing a mild correction after printing a fresh 19-year high at 104.93. Fed chair Jerome Powell in his interview with Marketplace national radio program stated that the Fed may elevate its interest rates by 50 basis points (bps) at each of its next two policy meetings. Adding to that, the Fed pledges that "we're prepared to do more." if data turn the wrong way.

Meanwhile, the Swiss franc is facing an extreme sell-off for a longer period as their ultra-loose monetary policy is failing to spurt the demand growth into their economy. Also, the flat Unemployment Rate and inflation numbers failed to provide and cushion to the asset.