- The USD/CHF shook between 0.8450–0.8673 on Monday before stabilizing; Volatility at its highest level since March 2020.
- The tariff threats and the Retaliation of China fueling the fears of global recession, increasing the demand for the Usd of safe refuge.
- The DXY rises to 103.47; The operators prepare for the key publication of the US CPI that could challenge the cutting bets of 100 basic points of the Fed.
The USD/CHF begins the Asian session on Tuesday slightly down, after a day of wild operations on Monday, which saw oscillations within the range of 0.8450–0.8673, and ended practically unchanged. At the time of writing, the PAR is quoted to 0.8588, lowering 0.02%.
The pair quotes about 0.8588 in the middle of a mixed feeling, with the pending investors of the US CPI as next directional catalyst
The mood on the market is mixed, with one of the three US indexes registering a positive day, while the Volatility Index (VIX) ended in 46.98, its highest level since March 2020. Tariffs continue to be the main engine, generating fears among investors as a global recession is coming, after the retaliation of China, which imposed tariff 34% reciprocal to US imports.
On Monday, Trump threatened to impose 50% tariffs on China’s products if they did not raise taxes on US goods before April 8.
The rumors of a 90 -day pause in the tariffs, except for China, revealed by the White House economic advisor, Hassett, were subsequently denied by Washington, which described the comments of “false news”, thus increasing the demand for the dollar.
The US dollar index (DXY), which tracks the value of the US dollar in front of a six -currency basket that includes the CHF, rose 0.56% to 103.47.
The US economic calendar remains empty, although the operators are pending the publication of the March Consumer Price Index (CPI). If the general and underlying figures surprise investors and exceed the estimates and readings of the previous month, this could harm the bets of the monetary markets that the Federal Reserve would cut the rates in almost 100 basic points towards the end of the year, according to Prime Market Terminal data.
Forecast of the USD/CHF price: technical perspective
The USD/ChF remains biased down, although the pair has shown signs of recovery. After Monday’s operations, the torque is expected to consolidate within the range of 0.8450–0.8673, without buyers or sellers being in control.
The relative force index (RSI) remains bassist, with the index remaining in overall conditions. However, as the slope becomes slightly ascending, there is the possibility of a rebound.
In that case, the first resistance of the USD/CHF would be the level of 0.8700, followed by the Simple Mobile (SMA) of 200 days at 0.8798. On the other hand, the bearish trend is expected to resume, with the first support level at 0.8550, followed by the 0.8500 mark.
Franco Swiss faqs
The Swiss Franco (CHF) is the official currency of Switzerland. It is among the ten most negotiated coins worldwide, reaching volumes that far exceed the size of the Swiss economy. Its value is determined by the general feeling of the market, the country’s economic health or the measures taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franco was linked to the euro (EUR). The link was eliminated abruptly, which resulted in an increase of more than 20% in the value of the Franco, which caused a turbulence in the markets. Although the link is no longer in force, the fate of the Swiss Franco tends to be highly correlated with that of the euro due to the high dependence of the Swiss economy of neighboring Eurozone.
The Swiss Franco (CHF) is considered a safe shelter asset, or a currency that investors tend to buy in times in markets. This is due to the perception of Switzerland in the world: a stable economy, a strong export sector, great reserves of the Central Bank or a long -standing political position towards neutrality in global conflicts make the country’s currency a good option for investors fleeing risks. It is likely that turbulent times strengthen the value of the CHF compared to other currencies that are considered more risky to invest.
The Swiss National Bank (BNS) meets four times a year (once each quarter, less than other important central banks) to decide on monetary policy. The bank aspires to an annual inflation rate of less than 2%. When inflation exceeds the objective or it is expected that it will be overcome in the predictable future, the bank will try to control the growth of prices raising its type of reference. 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.
Macroeconomic data published in Switzerland are fundamental to evaluate the state of the economy and can affect the assessment of the Swiss Franco (CHF). The Swiss economy is stable in general terms, but any sudden change in economic growth, inflation, current account or foreign exchange reserves have the potential to trigger movements in the CHF. In general, high economic growth, low unemployment and a high level of trust are good for Chf. On the contrary, if the economic data suggests to a weakening of the impulse, the CHF is likely to depreciate.
As a small and open economy, Switzerland depends largely on the health of the neighboring economies of the Eurozone. The European Union as a whole is the main economic partner of Switzerland and a key political ally, so the stability of macroeconomic and monetary policy in the Eurozone is essential for Switzerland and, therefore, for the Swiss Franco (CHF). With such dependence, some models suggest that the correlation between the fate of the euro (EUR) and the Swiss Franco is greater than 90%, or almost perfect.
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.
