- USD/CHF is trading weaker around 0.8945 during the European session on Tuesday.
- Rising bets on Fed rate cuts could limit the pair’s upside.
- Political uncertainty in the US and Europe could support the Swiss franc for the time being.
The USD/CHF pair is trading lower near 0.8945 on Tuesday during the early European session. The pair is retreating despite the modest recovery of the Dollar. Later on Tuesday, the US retail sales release will be in focus. Also, Adriana Kugler of the Federal Reserve (Fed) is scheduled to give a speech.
The pair’s decline is supported by the growing expectation that the US Fed will cut interest rates earlier than expected this September. This, in turn, exerts some selling pressure on the dollar. Traders now price in a 100% probability that the Fed’s federal funds rate will be cut by at least 25 basis points when the Federal Open Market Committee (FOMC) meets in September.
Fed Chairman Jerome Powell said Monday that recent inflation data has increased confidence that price increases are returning to target in a sustainable manner. Powell also said the Fed does not wait until inflation hits 2% before acting, suggesting rate cuts may not be far off.
On the Swiss front, political uncertainty in the US and the second round of French parliamentary elections last weekend provide some support for safe-haven currencies like the CHF. Donald Trump was wounded in the ear during his rally in Butler, Pennsylvania, in an assassination attempt. One spectator died in the attack, two others were seriously injured, and Trump was photographed with blood coming out of his ear, according to the BBC. In addition, concerns about France’s budget persist, helping to boost the INR.
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.
