USD/CHF Aiming to Break Above 0.9040 amid Positive USD Recovery
In the Asian session, the USD/CHF pair is facing significant resistance near the 0.9040 level. The Swiss Franc is striving to continue its upward trajectory, supported by the impressive recovery of the US Dollar Index (DXY).
In Tokyo, S&P500 futures are displaying minor losses as investors exercise caution, fearing that additional interest rate hikes by the Federal Reserve (Fed) could potentially accelerate the United States into a recession. On Wednesday, US equities exhibited high volatility as optimism stemming from the Fed's decision to pause its tightening cycle faded after Fed Chair Jerome Powell confirmed that two small interest rate hikes are planned and will be announced before the end of the year.
The USD Index has demonstrated a remarkable V-shaped recovery after hitting a four-week low at 102.66. The Fed's hawkish stance has injected fresh optimism into the USD Index, and further gains are anticipated amidst the current cautious market sentiment.
With interest rate guidance clarified, investors are now shifting their attention towards the monthly US Retail Sales data for May. Expectations suggest a contraction of 0.1% compared to the 0.4% expansion recorded in April. Given the significant decline in food and gasoline prices, a careful analysis of the Retail Sales report is necessary to determine whether the contraction in retail demand is due to lower prices of essential goods or if the economy is losing resilience.
Despite expectations of the Swiss National Bank (SNB) raising interest rates, Swiss Franc bulls have struggled to counter the strength of the US Dollar. SNB Chairman Thomas J. Jordan has already emphasized that the central bank will not wait for inflation to increase, as the adverse effects of a low inflation environment are considerably less severe than those of high inflation.
In Tokyo, S&P500 futures are displaying minor losses as investors exercise caution, fearing that additional interest rate hikes by the Federal Reserve (Fed) could potentially accelerate the United States into a recession. On Wednesday, US equities exhibited high volatility as optimism stemming from the Fed's decision to pause its tightening cycle faded after Fed Chair Jerome Powell confirmed that two small interest rate hikes are planned and will be announced before the end of the year.
The USD Index has demonstrated a remarkable V-shaped recovery after hitting a four-week low at 102.66. The Fed's hawkish stance has injected fresh optimism into the USD Index, and further gains are anticipated amidst the current cautious market sentiment.
With interest rate guidance clarified, investors are now shifting their attention towards the monthly US Retail Sales data for May. Expectations suggest a contraction of 0.1% compared to the 0.4% expansion recorded in April. Given the significant decline in food and gasoline prices, a careful analysis of the Retail Sales report is necessary to determine whether the contraction in retail demand is due to lower prices of essential goods or if the economy is losing resilience.
Despite expectations of the Swiss National Bank (SNB) raising interest rates, Swiss Franc bulls have struggled to counter the strength of the US Dollar. SNB Chairman Thomas J. Jordan has already emphasized that the central bank will not wait for inflation to increase, as the adverse effects of a low inflation environment are considerably less severe than those of high inflation.
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