USD/CHF 0.9700 lower focusing on Swiss trade numbers, SNB, Fed – News
USD/CHF retreats from intraday highs but posts small gains on the day. The Swiss trade balance, imports/exports print soft figures for the month of August. DXY marks a two-day downtrend amid Fed bets, defying inflation expectations. The SNB is on track for a 0.50% rate hike, but the Fed’s 75 basis point rate hike is showing up in most prices.
USD/CHF remained tenderly bullish around 0.9655 after a slow start to the week as weaker Swiss data added to broader US Dollar strength in Tuesday’s Asian session. Another challenge for buyers of the Swiss currency (CHF) pair is a cautious mood ahead of monetary policy decisions from the US Federal Reserve (Fed) and Swiss National Bank (SNB).
That said, the Swiss trade balance fell to 3,424 million in August from the market forecast of 3,717 million and a previous reading of 3,522 million. Details showed that exports also fell to 20,942 million from 22,242 million while imports fell to 17,519 million from 18,720 million in the reported month.
Elsewhere, the US dollar index (DXY) posted its first daily gain in three, around 109.65-70, while trailing Treasury yields. Geopolitical fears surrounding China and Russia are also more firmly entrenched.
Of note, US housing counts and multi-day lows, below US inflation expectations based on the St. Louis Federal Reserve (FRED) breakeven inflation rate, defied expectations. US dollar buyers earlier.
Against this backdrop, S&P 500 futures faded from the previous day’s rebound from a two-month low near 3,920, while 10-year and 2-year US Treasury yields held steady. their highest levels since April 2011 and October 2007, respectively.
Looking ahead, Wednesday’s Federal Open Market Committee (FOMC) meeting will be the first key catalyst for USD/CHF with a 0.75 rate hike mostly priced in. With that, whether the US dollar continued to rise depended on Fed Chairman Jerome Powell’s speech and economic forecast. After that, the SNB’s 0.50% rate hike on Thursday will show the first positive rate since late 2014, which in turn could help CHF buyers return.
Monday’s doji candlestick challenges USD/CHF buyers unless the quote delivers a daily close above the 100-DMA barrier around 0.9690.
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