Market news

25 November 2022

USD/CHF fails to sustain above 0.9440 amid volatile US Dollar, Swiss Employment in focus

  • USD/CHF is failing to sustain above the 0.9440 hurdle as the risk-on impulse is still solid.
  • The US Dollar has displayed wild gyration in the morning trade.
  • Swiss Employment level is seen higher at 5.331M than the prior release of 5.316M.

The USD/CHF pair has moved above the immediate hurdle of 0.9940 in the Tokyo session. The risk-sensitive currencies have sensed a minor selling interest as the USD Index (DXY) is displaying wild movements in the early trade. It would be early to say that the risk profile is changing as the volatility in the US Dollar arrived is not backed by any fundamental catalyst.

The returns on US Treasury bonds have trimmed further as investors are not expecting the continuation of a bigger rate hike regime by the Federal Reserve (Fed). The 10-year US Treasury yields have dropped below 3.67% and are expected to display more weakness ahead. Meanwhile, S&P500 futures are displaying some signs of further advances as expectations of a slowdown in policy tightening measures promise an improvement in economic projections ahead.

The golden days of the US Dollar have reached endgame as the United States Consumer Price Index (CPI) has already peaked and has displayed signs of exhaustion. It would be optimal to remain a little cautious as the recent decline in price pressures in the October inflation report is a one-thing thing. Therefore, confidence could get firmer only by a spree of the same.

Going forward, a rough session could be witnessed by the market participants as investors would adjust their extended overnight positions on Friday after a holiday on Thursday on account of Thanksgiving Day.

On the Swiss Franc front, investors are awaiting the release of Friday’s Employment data for the third quarter. The economic data is seen higher at 5.331M than the prior release of 5.316M. An upbeat employment data would support the Swiss National Bank (SNB) to stick with its expansionary policy approach.

 

 

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