- USD/CHF falls on US Dollar weakness amid higher odds of a Fed rate cut next week.
- The CME FedWatch tool indicates a nearly 99% probability of a 25 basis point rate cut on December 18.
- Swiss franc steady ahead of SNB interest rate decision on Thursday.
USD/CHF offers its recent gains as the US Dollar (USD) corrects lower after breaking its four-day winning streak. The USD/CHF pair is trading around 0.8840 during Asian hours on Thursday. The Dollar is receiving downward pressure as the recent US CPI report appears not to be enough to prevent the Federal Reserve (Fed) from cutting rates in December.
The CME FedWatch tool suggests a nearly 99% probability of Fed rate cuts by 25 basis points on December 18. Traders are focusing their attention on the US November Producer Price Index (PPI) for fresh momentum, due out later on Thursday.
The US Consumer Price Index (CPI) rose to 2.7% year-on-year in November from 2.6% in October. The headline CPI reported a reading of 0.3% month-on-month, in line with market consensus. Meanwhile, core CPI, which excludes volatile food and energy prices, rose 3.3% year-on-year, while core CPI rose 0.3% month-on-month in November, as expected.
The Swiss Franc (CHF) remains relatively stable in anticipation of the Swiss National Bank (SNB) cutting its key policy rate by 25 basis points (bps) at its meeting later in the day. This rate cut will mark the fourth consecutive reduction, as inflation remains “comfortably” within the central bank’s target range of 0-2%.
However, some economists anticipate a 50 basis point cut in December to boost economic growth, as Swiss consumer price inflation rose to 0.7% in November, from 0.6% in October, but below the projected 0.8%. . Additionally, Switzerland’s economy remains sluggish, with GDP growth at 0.4% quarterly in the third quarter, compared to 0.6% in the second quarter.
economic indicator
SNB interest rate decision
He Swiss National Bank It administers the country’s monetary policy as an independent central bank. He is obliged by the constitution and by statute to act in accordance with the interests of the country. Its primary objective is to ensure price stability taking into account economic growth. To achieve this, the bank must create an appropriate environment for the performance of economic activity.
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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.
