The USD/CHF currency pair has risen to approximately 0.8730 during the early European session on Friday, supported by renewed demand for the US dollar. Traders are preparing for the release of the advanced US Michigan Consumer Sentiment data for November and a speech from Federal Reserve Governor Michelle Bowman later in the day.
On Thursday, the US Federal Reserve announced a 0.25 percentage point reduction in its borrowing costs, halving the size of the cut made in September. The federal funds rate now stands at a range of 4.5% to 4.75%, down from 4.75% to 5%. In his press conference, Fed Chair Jerome Powell noted that the economy remains robust and has made substantial progress toward the central bank’s goals over the past two years. Powell also emphasized the Fed’s cautious approach, aiming to strike a balance between moving too quickly or too slowly with interest rate changes to avoid unnecessary damage to the labor market. He affirmed that the central bank will continue to assess economic data to guide its decisions on the “pace and destination” of future rate adjustments.
Meanwhile, the US dollar is seeing some buying interest as market participants anticipate that policies under former President Donald Trump may spur economic growth and inflation, potentially slowing the pace of future interest rate cuts.
In contrast, the Swiss Franc (CHF) is supported by ongoing global uncertainties, particularly regarding economic growth and geopolitical tensions in the Middle East. The situation surrounding Israel’s multifront conflicts has been further complicated by Trump’s recent comeback victory, which may diminish diplomatic efforts to resolve the tensions. This has led to questions about the US’s long-term support for Israel’s military actions against Iran and its allies, boosting demand for the safe-haven Swiss Franc.
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