The USD/CHF pair is trading around 0.8980 during the European session on Thursday, maintaining proximity to its two-week high of 0.8983, achieved on Wednesday. Investors are eagerly awaiting the release of the US GDP Annualized (Q1) report, expected later in the North American session, which is projected to show a slight increase to 1.4% from the previous 1.3%.
The US Dollar (USD) is experiencing pressure due to traders’ anticipation of Friday’s Core PCE Price Index inflation report, which is forecasted to decline year-over-year to 2.6% from 2.8%. This data is critical as it is regarded as the Federal Reserve’s (Fed) preferred measure of inflation. Market participants are hopeful that signs of easing inflation will prompt the Fed to consider rate cuts sooner rather than later.
The US Dollar Index (DXY), which tracks the value of the USD against six major currencies, may find support from higher US Treasury yields, with 2-year and 10-year yields at 4.75% and 4.33%, respectively, at the time of writing.
Fed Governor Michelle Bowman reiterated on Tuesday her belief that maintaining the current policy rate for some time will likely be sufficient to control inflation. Concurrently, Fed Governor Lisa Cook mentioned that cutting interest rates “at some point” would be appropriate given the significant progress on inflation and the gradual cooling of the labor market, though she did not specify the timing.
On the Swiss front, the economic calendar is sparse, leaving the USD/CHF pair largely influenced by broader market trends and US economic data. However, the KOF Swiss Economic Institute is expected to release the Swiss Leading Indicator for June on Friday, anticipated to show an improved reading of 101.0 compared to the previous 100.3.
This combination of US economic reports and Swiss data will likely guide the future movement of the USD/CHF pair as traders react to evolving market conditions and central bank signals.
Related Topics:
