- USD/CHF stabilizes about 0.8340 while the US dollar bounces.
- Moody’s reduced the sovereign credit rating of the US to AA1 from AAA.
- The SNB opens the door to negative interest rates amid global economic uncertainty.
The USD/CHF pair is stabilized around 0.8340 during the American session on Tuesday after recovering initial losses. The Swiss frank pair bounces while the US dollar index (DXY) recovers after attracting offers near the weekly minimum around 100.00.
Earlier in the day, the US dollar quoted down since Moody’s reduced the sovereign credit rating of the United States (USA) due to the growing concerns about debt. In addition, new concerns about the descale in the commercial war between the US and China also weighed on the US dollar. Beijing condemns Washington for discouraging the use of artificial intelligence (AI) chips manufactured by Huawei and Chinese AI models, highlighting them as a threat to US export controls.
At the national level, investors expect the preliminary data of the S& Global S& Global Purchase Managers Index (PMI) for May, which will be published on Thursday. The PMI report is expected to show that general business activity grew at a constant pace.
Meanwhile, the Swiss Franco (CHF) lies upwards in front of its main peers, but it is expected to be promoted by market expectations on the monetary policy perspective of the Swiss National Bank (SNB). The president of the SNB, Martin Schlegel, has indicated that the Central Bank is ready to consider negative interest rates to combat global economic risks.
Franco Swiss price today
The lower table shows the rate of change of the Swiss Franco (CHF) compared to the main coins today. Franco Swiss was the strongest currency against the Australian dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.03% | 0.09% | 0.07% | -0.15% | 0.91% | 0.48% | -0.09% | |
| EUR | -0.03% | 0.07% | 0.03% | -0.18% | 0.89% | 0.47% | -0.12% | |
| GBP | -0.09% | -0.07% | -0.04% | -0.25% | 0.79% | 0.42% | -0.15% | |
| JPY | -0.07% | -0.03% | 0.04% | -0.23% | 0.83% | 0.40% | -0.12% | |
| CAD | 0.15% | 0.18% | 0.25% | 0.23% | 1.07% | 0.64% | 0.10% | |
| Aud | -0.91% | -0.89% | -0.79% | -0.83% | -1.07% | -0.42% | -0.96% | |
| NZD | -0.48% | -0.47% | -0.42% | -0.40% | -0.64% | 0.42% | -0.54% | |
| CHF | 0.09% | 0.12% | 0.15% | 0.12% | -0.10% | 0.96% | 0.54% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the Swiss Franco from the left column and move along the horizontal line to the US dollar, the percentage change shown in the picture will represent the ChF (base)/USD (quotation).
The USD/CHF is close to the horizontal support set from the minimum of April 25, 0.8335, which used to be an important resistance to the torque. The asset oscillates around the 20 -day exponential (EMA) mobile average, which quotes around 0.8340, indicating a lateral trend.
The 14-day relative force index (RSI) oscillates within the range of 40.00-60.00, suggesting a volatility contraction.
A new upward movement towards the maximum of April 10, 0.8580 and the maximum of April 8, 0.8611 would appear if it breaks above the psychological level of 0.8500.
On the other hand, a downward movement below the minimum of May 7, 0.8186 would drag the asset towards the minimum of April 11, 0.8100, followed by the minimum of April 21, 0.8040.
USD/CHF daily graphics
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values that overcome in new purchases. It is usually positive for the US dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
