During the European session on Tuesday, USD/CHF experienced a halt to its three-day winning streak, hovering around the 0.9100 mark. The slight uptick in the yield on the 10-year Swiss government bond, reaching approximately 0.72%, has signaled the Swiss National Bank (SNB) to maintain its current interest rates. This move potentially bolstered the Swiss Franc (CHF) and weighed on the USD/CHF pair.
Traders are closely monitoring the upcoming release of the Employment Level data by the Swiss Statistics later in the week. Additionally, attention is focused on Swiss National Bank (SNB) Chairman Thomas Jordan’s scheduled speech at the Swiss Media Forum in Lucerne, Switzerland, on Friday, where he will discuss communication, monetary policy, and its public impact.
On the US front, the downward correction of the US Dollar (USD) is attributed to the decline in US Treasury yields, putting pressure on the USD/CHF pair. The US Dollar Index (DXY), which gauges the USD against six other major currencies, dipped to around 104.60, as 2-year and 10-year yields on US Treasury bonds stood at 4.83% and 4.43%, respectively, at the time of reporting.
The US Federal Reserve (Fed) continues to maintain a cautious stance regarding inflation and the potential for rate adjustments in 2024. Loretta Mester, President of the Federal Reserve Bank of Cleveland, remarked in an interview with Bloomberg on Monday that she no longer deems three rate cuts in 2024 appropriate. Mester emphasized the upward skewness of inflation risks and underscored the importance of gathering additional data on inflation, given the robustness of the economy.
