During the early European hours on Tuesday, the USD/CHF pair continued its upward trajectory, nearing the 0.9080 mark for the second consecutive day. The surge in US Treasury bond yields, fueled by encouraging ISM Manufacturing PMI data from the United States (US), provided a significant boost to the US Dollar (USD), thereby supporting the pair’s advancement.
The US Dollar Index (DXY) maintained its winning streak for the fifth consecutive session, hovering around 105.10 at the time of reporting. Traders’ diminished expectations for a quarter-point interest rate cut by the Federal Reserve in its upcoming June meeting contributed to this positive momentum.
Federal Reserve Chairman Jerome Powell’s remarks on Friday echoed this sentiment, as he indicated that recent US inflation data aligns with the central bank‘s projections, reinforcing their stance on interest rate adjustments for the year.
Conversely, Real Retail Sales (YoY) data from Switzerland revealed a decline of 0.2% in February, falling short of the anticipated 0.4% increase and trailing the previous month’s 0.3% uptick. This disappointing figure exerted downward pressure on the Swiss Franc (CHF).
The Swiss National Bank (SNB) underscored the feasibility of easing monetary policy, citing the effectiveness of its inflation-fighting measures over the past two and a half years in its recent statement.
Furthermore, analysts at ING anticipate two additional rate cuts from the SNB in 2024, contingent upon the absence of unforeseen developments in the global economic landscape that could rapidly escalate inflationary pressures once again.
