- USD/CHF has dropped below the 0.9160 support as Fed has come closer to the terminal rate.
- Fed Powell remained softer on interest rate guidance citing “some additional policy firming may be appropriate”.
- The interest rate decision for SNB Jordan would be incredibly difficult, which is still dealing with the Credit Suisse mess.
The USD/CHF pair has slipped below the immediate support of 0.9160 in the Asian session. The Swiss franc asset has retreated after a recovery attempt to near 0.9180 as the commentary from Federal Reserve (Fed) chair Jerome Powell in his monetary policy statement indicates that the central bank is close to reaching the terminal rate.
After hiking interest rates by 25 basis points (bps) consecutively to 4.75-5.00%, Fed Powell remained softer on interest rate guidance citing “some additional policy firming may be appropriate”.
Dovish guidance on interest rates has weighed heavily on the US Dollar Index (DXY). The USD Index has dropped after a short-lived recovery and is expected to continue its downside journey.
S&P500 futures are showing some gains after a sell-off on Wednesday, however, the appeal for US equities is still weak. Investors seem dissatisfied from US Treasury Secretary Janet Yellen's commentary that the government "is not considering insuring all uninsured bank deposits," The rollback of assurance has receded confidence among investors.
Meanwhile, the demand for US government bonds has soared as tight credit conditions from the banks for households and businesses after the collapse of Silicon Valley Bank (SVB) and Signature Bank would result in cooling demand and inflation.
Thursday’s session is going to remain extremely volatile as investors are awaiting the interest rate decision from the Swiss National Bank (SNB). Analysts from ING cited “Our baseline scenario remains a 50 bps rate hike, but the probability of this has seriously diminished, and neither the status quo nor a 25 bps hike can be ruled out. Unlike the ECB, the SNB has not pre-announced anything, so it is freer in its choices.”
The decision is likely to be incredibly difficult for SNB Chairman Thomas J. Jordan, which is still managing the Credit Suisse mess.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.