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- USD/CHF prolongs its uptrend for the fifth straight day amid sustained USD buying interest.
- The Fed’s hawkish tilt offsets economic concerns and continues to push the USD higher.
- Bets that the SNB could cut rates into negative territory further exert pressure on the pair.
The USD/CHF pair attracts buyers for the fifth consecutive day and climbs to its highest level since August 22 during the Asian session on Tuesday. The momentum lifts spot prices to the 0.8100 neighborhood and is sponsored by sustained US Dollar (USD) buying.
The USD Index (DXY), which tracks the Greenback against a basket of currencies, advanced to an over three-month top on the back of the US Federal Reserve’s (Fed) hawkish tilt. In fact, Fed Chair Jerome Powell pushed back against market expectations for another interest rate cut in December. This helps offset concerns about economic risks stemming from the prolonged US government shutdown and continues to act as a tailwind for the buck, which, in turn, is seen pushing the USD/CHF pair higher.
Meanwhile, the Swiss Franc (CHF) might continue with its relative underperformance as softer inflation data revived bets that the Swiss National Bank (SNB) will lower interest rates into negative territory. This marks a significant divergence in comparison to the Fed’s outlook. Apart from this, the underlying bullish sentiment surrounding the global financial markets undermines the CHF, which, in turn, favors bullish traders and backs the case for a further near-term appreciating move for the USD/CHF pair.
Moving ahead, there isn’t any relevant market-moving economic data due for from the US amid the ongoing US government closure. However, comments from influential FOMC members will be scrutinized for more cues about the future rate-cut path, which, in turn, will drive the USD demand. Apart from this, the broader risk sentiment will be looked upon to grab short-term trading opportunities around the USD/CHF pair.
