Usdchf Turns Green On Hot Us Cpi

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Usdchf Turns Green On Hot Us Cpi

Usd/Chf Approaches 0.8790 Handle On Hot Us Cpi

The recent CPI report has made one thing very clear: Inflation has proven itself to be a lot more resilient than initially thought!

In theory, higher inflation isn't good, but in this case, it means the higher interest rates can stay the same for a long. That's the reason which is pushing the USD/CHF higher as even the US treasury yields have turned positive once again.

Usd/Chf Turns Bullish As Rate Cut Hopes Diminish

For now, the USD/CHF can be seen heading towards the 0.8790 - 0.8800 zone as the CPI report has managed to delay the rate cuts once again.

According to experts, the forecasts for rate cuts by the US Fed in the short term have gone out of the window. Despite this, the overall sentiment is still relying on the hopes of a June rate cut.

In fact, the odds of a rate cut in June are now at 67.2%. A look beyond that shows that there's an 84.2% chance of a rate cut happening in July 2024!

According to Janet Louise Yellen, there's very little chance that the interest rate in the USA will reach the pre-COVID levels. Additionally, she commented on how Biden's budget plan was reasonable in terms of interest rate assumptions.

While the greenback appears to be showing strength, the Swiss Franc (CHF) is having a hard time. It appears that the Swiss National Bank (SNB) has changed its stance and is no longer promoting a strong CHF.

On top of it all, the current market's sentiment is 'risk-on' which is also putting pressure on the CHF. This means that CHF, which was once known as a safe-haven asset, is now slowly losing that title.

Meanwhile, another factor which hints at a weak CHF is the consumer confidence in Switzerland. In January, the indicator showed a reading of -41.1 which has now moved to near -42.3 during February.

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