The USD/CHF pair remained depressed for the fourth consecutive day and touched a fresh low since September 2011, around the 0.8025 region during the Asian session on Thursday (6/26).
The US Dollar (USD) selling bias remained unabated amid concerns about the future independence of the Federal Reserve (Fed), which in turn, was seen as a key factor weighing on the USD/CHF pair. US President Donald Trump stepped up his criticism of Fed Chairman Jerome Powell for not cutting interest rates, calling him a "bad guy". Trump also floated the idea of firing Powell and said that he is considering several candidates as contenders for the Fed's top job.
Meanwhile, traders have been betting that the Fed will cut interest rates by at least 50 basis points before the year-end and are also pricing in around 25% chances of a rate cut in July. In contrast, the Swiss National Bank (SNB) signaled that it has no plans to cut interest rates further, disappointing investors who had expected rates to return to negative territory this year. This was seen as another factor that contributed to the weaker tone surrounding the USD/CHF pair.
However, the latest optimism over a ceasefire between Israel and Iran continued to underpin the global risk sentiment, which in turn, was seen denting demand for traditional safe-haven assets. This held traders from placing any aggressive bullish bets around the Swiss Franc (CHF) and helped limit losses for the USD/CHF pair. Traders now look forward to the US macro data – final Q1 GDP, Weekly Initial Jobless Claims, Durable Goods Orders, and Pending Home Sales.
Apart from this, speeches by influential FOMC members will drive the USD and provide some impetus to the USD/CHF pair. The focus would then shift to Friday's release of the US Personal Consumption Expenditures (PCE) Price Index. The crucial US inflation data will provide cues on the Fed's future rate cut path, which in turn will play a key role in determining the next leg of a directional move for the greenback and the currency pair. (alg)
Source: FXstreet
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