Zurich, Switzerland – The USD/CHF pair attempts to break its winning streak that commenced on January 11, trading lower near 0.8690 during the Asian session on Wednesday. The modest decline is attributed to a slight pullback in the US Dollar, influenced by downbeat US Treasury yields.
The US Dollar Index (DXY) dips to around 103.40, with 2-year and 10-year yields on US bond coupons standing at 4.32% and 4.11%, respectively. Market sentiment indicates a reduced likelihood of a rate cut by the Federal Reserve (Fed) in March. However, former St. Louis Fed President James Bullard presents a dissenting opinion, foreseeing interest rate cuts even before inflation hits 2.0%, possibly as early as March.
Market participants are closely monitoring the S&P Global Purchasing Managers Index (PMI) data from the United States, expected to be released on Wednesday, for potential market direction. Meanwhile, the Swiss National Bank (SNB) President Thomas Jordan addresses the strength of the Swiss Franc (CHF), acknowledging its role in curbing inflation. Despite expressing confidence in the Swiss economy and ruling out a recession, Jordan notes expectations of weak growth.
In terms of economic indicators, the Federal Statistical Office of Switzerland reported a deceleration in the decline of Producer and Import Prices in December compared to the preceding month. Traders eagerly await upcoming releases, including Real Retail Sales and the ZEW Survey – Expectations, to glean further insights into the trajectory of the Swiss National Bank’s interest rates.
