Usdchf Trades Lower On Weaker Greenback

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Usdchf Trades Lower On Weaker Greenback

Usd/Chf Trades Below 0.8700 On Weaker Greenback

After closing the day in green for two days in a row, the USD/CHF appears to have turned lower towards the 0.8700 handle.

Experts believe the USD/CHF is decreasing due to the broader weakness in the greenback. At the same time, the CHF (Swiss Franc) is gaining ground due to the 10-year bond yields (Switzerland) support.

Swiss Bond Yields Touch 0.93%

For now, the yield on the 10-year Swiss bonds is near 0.93% and shows a bullish trend. The uptick in the Swiss bond yields is directly related to the sentiment of the global markets. Additionally, the comments from Powell also had a positive effect on the yields of Swiss bonds.

If we look at the Swiss side, the last meeting of SNB in 2023 led to no change in the interest rate. As a result, the interest rate in Switzerland is still near 1.75%. However, one thing is clear - The SNB is done with the tightening cycle &, and the next step is rate cuts.

If we look at the consumer prices in Switzerland, they remain steady on a M/M basis. However, the core prices show a slight increase. Given all of this, the Swiss inflation will likely stay capped under 2.0%.

Based on this information, the market is now looking forward to the first rate cut by the SNB in September 2024.

On the US side, profit-taking can be seen in the USD index (DXY) as it closed the last two sessions in green. For now, the DXY is trading near 104.30 with a bearish outlook in the short term.

weakness in the DXY is also showing in the bond yields (USA), which is also a factor keeping USD/CHF lower in the short term.

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