- USD/CHF recovers intraday losses as US Dollar outlook remains firm.
- Investors await US inflation data as it will influence the Fed’s interest rate outlook.
- The SNB is expected to cut interest rates further to boost inflationary pressures.
The USD/CHF pair recovers its intraday losses and stabilizes near 0.9160 in the European session on Tuesday. The Swiss Franc pair recovers as investors remain cautious ahead of the United States (US) Consumer Price Index (CPI) data for December, due to be released in December.
Investors will pay close attention to US inflation data, which will influence market speculation on the Federal Reserve’s (Fed) interest rate outlook. Year-on-year headline inflation is expected to have accelerated to 2.8% from 2.7% in November, with underlying readings growing steadily at 3.3%.
According to the CME FedWatch tool, traders rate the probability that the central bank will cut interest rates once this year at approximately 69%.
Meanwhile, the Swiss Franc (CHF) has underperformed against the US dollar over the past few months. The Swiss National Bank (SNB) is expected to continue lowering interest rates further to boost inflationary pressures. The SNB has already reduced its key lending rates to 0.5%.
USD/CHF is trading near its 15-month high around 0.9200. The outlook for the Swiss Franc pair remains firm as the 20-week EMA near 0.8883 is tilted higher.
The 14-week Relative Strength Index (RSI) is trading in the bullish range of 60.00-80.00, suggesting strong upward momentum.
For a fresh upside towards the round level resistance of 0.9300 and the March 16, 2023 high of 0.9342, the asset needs to decisively break above the October 2023 high of 0.9244.
On the other hand, a move lower below the psychological support of 0.9000 would drag the asset towards the November 22 high of 0.8958, followed by the December 16 low of 0.8900.
USD/CHF weekly chart
US Dollar FAQs
The United States 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 alongside local banknotes. According to 2022 data, it is the most traded currency in the world, with more than 88% of all global currency exchange operations, equivalent to an average of $6.6 trillion in daily transactions. After World War II, the USD took over from the pound sterling as the world’s reserve currency.
The single most important factor influencing the value of the US Dollar is monetary policy, which is determined by the Federal Reserve (Fed). The Fed has two mandates: achieve price stability (control inflation) and promote full employment. Your main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% target set by the Fed, the Fed raises rates, 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 enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit into a clogged financial system. This is an unconventional policy measure used when credit has dried up because banks do not lend to each other (for fear of counterparty default). It is a last resort when a simple lowering of interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis of 2008. It involves the Fed printing more dollars and using them to buy US government bonds, primarily from financial institutions. QE usually leads to a weakening of the US Dollar.
Quantitative tightening (QT) is the reverse process by which the Federal Reserve stops purchasing bonds from financial institutions and does not reinvest the principal of maturing portfolio securities 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.