- USD/CHF soars, hitting highs not seen since mid-June and testing the crucial 100-day SMA at 0.8975.
- USD strength remained persistent, largely due to elevated Treasury yields.
- The market is still betting on a 60% chance of a Fed rate cut in September.
The pair USD/CHF continued to benefit from rising US Treasury yields on Wednesday and shrugged off weak housing data. The Swiss economic calendar remained empty during the session, leaving the pair at the mercy of broader market trends and US data.
The latest new home sales figures for May took a hit, with sales falling to 619,000 units, causing a decrease of approximately 11.3% from the previous 698,000, surprising the market, as expectations were at more favorable ones. 640,000 units. At the same time, the 2-year, 5-year, and 10-year US Treasury yields were reported at 4.74%, 4.33%, and 4.31% respectively, furthering the USD’s attractiveness.
Although the market suggests a 60% chance of a 25 basis point Fed rate cut in September, as measured by the CME’s FedWatch tool, the Federal Reserve hinted only at a cut in 2024. Fed officials including Gov. Michelle Bowman, have affirmed their hardline stance, expressing views that a policy rate cut, at this time, could be premature. Additionally, significant economic events that are likely to affect market expectations include the release of revisions to the first quarter Gross Domestic Product (GDP), which is expected to remain stable at 1.3% on Thursday, and the release of the Expenditure report. in May Personal Consumption (PCE) on Friday, the Fed’s preferred inflation indicator.
USD/CHF technical analysis
From a technical analysis perspective, the pair’s positioning indicates encouraging signs, having successfully established itself above the 20-day and 200-day SMA and attempting to trade the 100-day moving average, which, if achieved, could solidify its positive outlook. Furthermore, the RSI and MACD rose into positive territory, adding more arguments for the positive outlook.
USD/CHF Daily Chart
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.
