USD/CHF rises to four-month highs just above 0.9050 ahead of US data.

• USD/CHF appreciates on risk aversion ahead of key US data.
• Falling US Treasury yields could limit the US dollar's advance.
• The Swiss franc depreciates as a result of the contrast in monetary policies between the SNB and the Fed.

He USD/CHF is moving higher, driven by a stronger US Dollar (USD), possibly influenced by risk-off sentiment. This sentiment is fueled by anticipation surrounding the upcoming release of the US annualized Gross Domestic Product on Thursday and the Personal Consumption Expenditure (PCE) price index scheduled for Friday. As a result, the USD/CHF pair hits four-month highs just above 0.9050 during the first European hours of Wednesday.

However, the drop in US Treasury yields can be attributed to expectations surrounding the US Federal Reserve (Fed) considering possible rate cuts in June. This sentiment could limit the US dollar's gains, subsequently putting pressure on the USD/CHF pair.

The Swiss franc (CHF) has depreciated due to the different monetary policies between the Swiss National Bank (SNB) and the Federal Reserve. At its March meeting, The SNB surprised the markets by lowering its reference interest rate by 25 basis points, to 1.5%, marking the first rate cut among major central banks since the start of global disinflation in 2023. Following the announcement, the CHF extended its weakness so far this year. Being the first G10 central bank to cut rates will likely weaken the currency.

The Swiss franc could have gained strength due to risk aversion sparked by the opening of investigations by the European Union (EU) on Monday into large technology companies such as Apple, Google and Meta. Furthermore, the escalation of geopolitical tensions between Ukraine and Russia could lead investors to take refuge in safe haven currencies such as the CHF.