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- USD/CHF drifts lower for the second straight day on Wednesday amid sustained USD selling.
- Tuesday’s US macro data reaffirmed December Fed rate cut bets and undermines the USD.
- The divergent Fed-SNB policy expectations back the case for a further decline for spot prices.
The USD/CHF pair is seen extending the previous day’s pullback from a nearly three-week top – levels just above the 0.8100 mark – and losing ground for the second straight day on Wednesday. The slide is sponsored by the prevalent US Dollar (USD) selling bias and drags spot prices to mid-0.8000s, closer to the lower end of the weekly range, in the last hour.
The USD Index (DXY), which tracks the Greenback against a basket of currencies, slides to a one-week low as the delayed US macro data released on Tuesday reaffirmed dovish Federal Reserve (Fed) expectations. In fact, the US Producer Price Index (PPI) pointed to signs of cooling inflation, while US Retail Sales rose less-than-expected in September. Furthermore, the Conference Board’s Consumer Confidence Index dropped to a seven-month low in November amid concerns about a sluggish labor market, which gives the US central bank more headroom to ease policy further.
Meanwhile, New York Fed President John Williams said last Friday that interest rates could fall in the near term without putting the central bank’s inflation goal at risk. Separately, Fed Governor Christopher Waller said earlier this week that the job market is weak enough to warrant another quarter-point interest rate cut at the December meeting. Moreover, Fed Governor Stephen Miran echoed the dovish view and said in a television interview on Tuesday that a deteriorating job market and the economy calls for large interest rate cuts to get monetary policy to neutral.
Traders were quick to react and are now pricing in around an 85% chance that the US central bank will lower borrowing costs by 25 basis points in December. In contrast, the Swiss National Bank (SNB) is expected to hold its main policy rate at 0.00% for the foreseeable future, with analysts predicting rates will remain unchanged through 2027. This, in turn, backs the case for a further near-term depreciating move for the USD/CHF pair. Traders now look to the delayed release of US Durable Goods Orders, which, along with US Jobless Claims, could provide some impetus to the USD.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.59% | -0.68% | -0.33% | -0.17% | -0.67% | -1.34% | -0.30% | |
| EUR | 0.59% | -0.09% | 0.27% | 0.42% | -0.09% | -0.75% | 0.29% | |
| GBP | 0.68% | 0.09% | 0.35% | 0.51% | -0.00% | -0.66% | 0.38% | |
| JPY | 0.33% | -0.27% | -0.35% | 0.15% | -0.40% | -1.15% | 0.02% | |
| CAD | 0.17% | -0.42% | -0.51% | -0.15% | -0.50% | -1.17% | -0.13% | |
| AUD | 0.67% | 0.09% | 0.00% | 0.40% | 0.50% | -0.65% | 0.39% | |
| NZD | 1.34% | 0.75% | 0.66% | 1.15% | 1.17% | 0.65% | 1.05% | |
| CHF | 0.30% | -0.29% | -0.38% | -0.02% | 0.13% | -0.39% | -1.05% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
