- The USD/CHF advances as the US dollar can be seen, potentially driven by technical correction.
- The Trump import tariff on steel and aluminum will rise to 50% on Wednesday at 04:00 GMT.
- The recent Swiss data reinforces the chances of the SNB making a rate of 25 basic points in June.
The USD/CHF remains stronger per second consecutive session, quoting around 0.8240 during Wednesday’s Asian hours. He US dollar He continues to gain ground against his peers, potentially due to a technical correction. However, the tendency to “sell America” ​​could limit the bullish potential of the dollar and torque.
Operators expect the possible meeting between US President Donald Trump and Chinese President Xi Jinping to resolve commercial disputes. Any positive development around commercial disputes between the US and China could improve the feeling of the market. However, the two largest economies in the world have recently accused each other of violating the tariff truce achieved earlier this month.
In the US Data Front, the Employment and Labor Rotation Offers (Jolts) reported 7.39 million new positions in April, exceeding 7.2 million in March. This figure surprised by exceeding the expectations of the market of 7.1 million.
The results of the Survey of the Purchasing Managers Index (PMI) of the US ISM services will be published on Wednesday, and a slight recovery is expected in the feeling of the aggregate business operators. Operators will focus their attention on the report of Non -agricultural payrolls (NFP) of the US for May, which is expected to show 130K employment additions.
However, the bullish potential of USD/CHF torque It could be restricted since the Swiss Franco (CHF) could receive support from safe refuge flows amid the growing global economic uncertainty. The double Trump import tariff on steel and aluminum, which increases from 25% to 50%, is expected to enter into force on Wednesday at 04:00 GMT.
The data showed on Tuesday that the Swiss consumer price index decreased 0.1% year-on-year in May, falling below the 0-2% target range of the Swiss National Bank (SNB) and marking the first deflationary reading since March 2021.
Monday’s data showed that Swiss GDP grew by 0.5% intertrmetral in the first quarter, improving from 0.3% reviewed in the fourth quarter of 2024. However, the Swiss economy did not meet the preliminary expectations of a growth of 0.7%. Operators expect the Swiss National Bank (SNB) to take a rate of 25 basic points, reducing the 0% interest rate from the current 0.25%, with a chance of moving towards negative territory at the next meeting.
SNB FAQS
The Swiss National Bank (SNB) is the central bank of the country. As an independent Central Bank, its mandate is to guarantee the stability of medium and long term prices. To guarantee price stability, SNB aims to maintain adequate monetary conditions, which are determined by the level of interest rates and exchange rates. For SNB, price stability means an increase in the Swiss consumption price index (CPI) below 2% per year.
The Board of Directors of the Swiss National Bank (SNB) decides the appropriate level of its official interest rate depending on its price stability objective. When inflation exceeds the objective or it is expected that it will exceed it in the predictable future, the bank will try to control excessive price growth by raising its official interest rate. The highest interest rates are usually positive for the Swiss Franco (CHF), since they lead to greater returns, which makes the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken the CHF.
Yes. The Swiss National Bank (SNB) has intervened regularly in the exchange market to prevent the Swiss Franco (CHF) from being too much in front of other currencies. A strong CHF harms the competitiveness of the powerful export sector of the country. Between 2011 and 2015, the SNB implemented a fixed exchange rate with the euro to limit the progress of the CHF against the latter. The bank intervenes in the market using its large currency reserves, generally buying foreign currencies such as the US dollar or the euro. During high inflation episodes, in particular due to energy, SNB refrains from intervening in markets since a strong CHF makes energy imports cheaper, cushioning the price shock for households and suine companies.
SNB once meets the quarter (in March, June, September and December) to evaluate monetary policy. From each evaluation a decision on monetary policy and the publication of a medium -term inflation prognosis follow.
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.
