- USD/CHF gains momentum to near 0.7820 in Thursday’s early European session.
- Fed is anticipated to leave the interest rate unchanged at its March policy meeting.
- The US PCE inflation and GDP reports will be the highlights on Friday.
The USD/CHF pair gathers strength to around 0.7820 during the early European session on Thursday. The US Dollar (USD) strengthens against the Swiss Franc (CHF) as soaring oil prices threaten to spur inflation and force the US Federal Reserve (Fed) to adopt more hawkish policy stances.
The war in the Middle East stoked fears of inflation rising in the US, which increases the likelihood of the Fed keeping interest rates higher for longer. The US central bank is expected to hold rates steady at its upcoming March 17-18 meeting. Many economists anticipate the next rate cut will not occur until June or July 2026.
Oman has evacuated all vessels from its major oil export terminal at Mina Al Fahal as a precaution, according to Bloomberg on Thursday. Iran, meanwhile, has started its “most intense operation since the beginning of the war.” Tehran increased its efforts to block the vital oil conduit, the Strait of Hormuz. Rising tensions in the Middle East could boost the safe-haven currencies such as the CHF against the USD.
Traders will take more cues from the US Personal Consumption Expenditures (PCE) Price Index report for January, which is due on Friday. Any signs of softer inflation in the US could drag the Greenback in the near term. The preliminary reading of the US Gross Domestic Product (GDP) for the fourth quarter (Q4) will also be published.
