Usdchf Climbs Back On Hawkish Fed

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Usdchf Climbs Back On Hawkish Fed

Usd/Chf Climbs Back Above 0.8900 On Hawkish Fed

USD/CHF has finally ended its 3-day losing streak and climbed back above the 0.8900 handle on Monday. For now, the USD/CHF is trading near 0.8910 with eyes on the next levels at 0.8950 and then the 0.900 handle.

The USD has once again become traders' favorite currency after the Fed's surprising hawkish stance despite the easing inflation. With only one rate cut from the US Fed in 2024, it makes sense for the USD to show its fangs against the major currencies.

Snb To Keep Rates Steady

The economic forecasts from Switzerland are due later today, while the Swiss National Bank (SNB) will announce its interest rate decision on Thursday. In short, this will be a pretty interesting week for the USD/CHF as it carves the next trend.

Now that we know there will be just 1 rate cut this year, the next question is when it will take place. According to Fed Kashkari, there's a good chance that December 2024 will lead us to the first rate cut of the year. However, Fed Mester believes that it will now take longer to achieve the 2.0% inflation target.

Meanwhile, the US consumer confidence was a lot worse than initially forecasted, as the index dropped to 65.6 this month. Similarly, the UoM consumer inflation forecast (1-year) remains unchanged at 3.3%. This is a sign that even consumers believe that inflation will stay elevated till the end of the year.

look at Switzerland's side shows that the SNB will keep rates at 1.5 with no change at all. After all, the inflation in the country has once again started to show upside and is at the highest level since December last year.

If the Swiss National Bank gives any hints of a rate hike, it will put the CHF at an advantage over the USD. In this case, we can expect the USD/CHF to resume its uptrend once again.

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