The USD/CHF pair regained some ground, trading around 0.8835 during the early European session on Wednesday, ending a three-day losing streak. This recovery comes amid growing expectations for a less aggressive policy easing by the Federal Reserve (Fed). Fed officials, including Lisa Cook and Michelle Bowman, are scheduled to speak later on Wednesday, and their remarks may provide further direction.
Hawkish comments from Fed Chair Jerome Powell also supported the US Dollar. Powell stated that the Fed was “not in a hurry” to lower interest rates, which has led to a reduction in the likelihood of rate cuts in December. The probability of a 25 basis point rate cut has dropped to less than 60%, down from 82% earlier this week. Additionally, Kansas City Fed President Jeffrey Schmid expressed uncertainty about the extent to which rates could fall, but highlighted that recent rate cuts reflect confidence that inflation is moving toward the Fed’s 2% target.
On the Swiss side, the Swiss Franc (CHF) continues to benefit from safe-haven demand amid escalating geopolitical tensions. Reports from Russia’s Defense Ministry revealed that Ukraine had fired six ballistic missiles at a facility in Bryansk, including the use of ATACMS missiles. The ongoing Russia-Ukraine conflict is intensifying concerns, which often drives flows into the Swiss Franc as a traditional safe-haven currency.
Related Topics:
