USD/CHF weakens below 0.9150 on softer US Dollar, eyes on Swiss GDP data

Source Fxstreet
May 28, 2024 06:57
  • USD/CHF edges lower to 0.9120 in Tuesday’s early European session. 
  • The Fed’s officials remain cautious as inflation remains sticky above the 2% target. 
  • The cautious mood and the Middle East geopolitical risks boost traditional safe-haven currencies like the CHF. 

The USD/CHF pair weakens to 0.9120 during the early European session on Tuesday. The selling pressure of the Greenback drags the pair lower. Meanwhile, the cautious mood in the market remains to underpin the Swiss Franc (CHF) ahead of the Gross Domestic Product (GDP) data from Switzerland and the US, which are due on Thursday. 

The hawkish tone from Federal Reserve (Fed) officials in the minutes of the recent meeting, hotter-than-expected US inflation data, and stronger PMI data have triggered speculation that the US central bank will delay interest rate cuts this year. Financial markets have priced in nearly a 50% odds that the Fed will hold rates in September, according to the CME FedWatch tool. Inflation in the US remains sticky, and Fed policymakers emphasized the need to hold rates higher-for-longer to gain confidence that inflation will move towards the 2% target. This, in turn, might lift the Greenback for the time being and create a tailwind for USD/CHF. 

Investors will closely watch the release of the Personal Consumption Expenditures (PCE) index on Friday for fresh impetus. The US headline PCE is expected to show an increase of 0.3% MoM and 2.7% YoY in April. The Core PCE, the Fed’s preferred inflation gauge, is projected to show a rise of 0.3% MoM and 2.8% YoY in April. The hotter inflation data might further underpin the USD against the CHF. 

On the Swiss front, the cautious mood and the ongoing geopolitical tensions in the Middle East might boost safe-haven flows and support the CHF. Gazan officials reported on Monday that an Israeli airstrike triggered a fire that killed 45 people in a tent camp in the Gazan city of Rafah. Global leaders called for the implementation of a World Court order to halt Israel's attacks, per Reuters. Apart from this, the Swiss GDP number is estimated to expand 0.3% QoQ in Q1, while the annual GDP is forecast to grow 0.1% in Q1. The upbeat reading could further lift the CHF in the near term. 

USD/CHF

Overview
Today last price 0.912
Today Daily Change -0.0017
Today Daily Change % -0.19
Today daily open 0.9137
 
Trends
Daily SMA20 0.9099
Daily SMA50 0.9076
Daily SMA100 0.8903
Daily SMA200 0.8884
 
Levels
Previous Daily High 0.9154
Previous Daily Low 0.9132
Previous Weekly High 0.9158
Previous Weekly Low 0.9079
Previous Monthly High 0.9195
Previous Monthly Low 0.8998
Daily Fibonacci 38.2% 0.9141
Daily Fibonacci 61.8% 0.9146
Daily Pivot Point S1 0.9129
Daily Pivot Point S2 0.912
Daily Pivot Point S3 0.9107
Daily Pivot Point R1 0.915
Daily Pivot Point R2 0.9163
Daily Pivot Point R3 0.9171

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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