USD/CHF depreciates near 0.9100 on improving risk appetite

• USD/CHF loses ground as risk appetite improves on Monday.
• The Fed is expected to maintain its current interest rate range in June, between 5.25% and 5.5%.
• SNB President Thomas Jordan stated that the central bank is prepared to lower interest rates again if it deems necessary.

USD/CHF gives back recent gains recorded on Friday and trades around 0.9120 during the European session on Monday. The US Dollar (USD) depreciates reflecting a shift towards risk-on sentiment, undermining the USD/CHF pair.

However, market analysts expect the US Federal Reserve (Fed) to maintain the current interest rate range of 5.25%-5.5% at its next monetary policy meeting on Wednesday, due to concern about persistent inflation. Additionally, March core personal consumption price index (PCE) data showed a rise last Friday, suggesting that the Fed could delay any potential rate cut until September. According to CME's FedWatch tool, the probability that the Fed will keep interest rates unchanged at the June meeting has increased to 87.7%, up from 81.7% last week.

On the Swiss side, during the SNB General Shareholders' Meeting held on Friday, President Thomas J. Jordan underlined the bank's commitment to closely monitoring inflation. He stated that the SNB is willing to reduce interest rates again when necessary. In March, the SNB surprised the markets by lowering its main interest rate by 0.25 percentage points, to 1.5%.

President Jordan highlighted the SNB's success in fighting inflation, but warned that uncertainty remains high and unexpected disruptions may arise. He stressed the importance of continuing to focus on price stability and warned against calls by critics to extend the SNB's mandate, calling such demands dangerous.

Investors are expected to closely monitor the Consumer Price Index (CPI) data to be released on Thursday by the Swiss Federal Statistics Office. The CPI is the main indicator for measuring inflation and changes in purchasing trends in Switzerland.