Ella 
The USD/CHF pairing continues its upward trajectory, buoyed by a resilient US Dollar (USD) amid prevailing risk-off sentiment. Market participants keenly await the release of pivotal US economic indicators, including the Gross Domestic Product Annualized report slated for Thursday and Personal Consumption Expenditures (PCE) data due on Friday. As anticipation mounts, the USD/CHF pair reaches a four-month pinnacle near 0.9050 during the early trading hours of Wednesday in the European session.
Nevertheless, the retreat observed in US Treasury yields may be attributed to speculations surrounding the potential adoption of rate cuts by the US Federal Reserve (Fed) come June. Such deliberations could potentially hamper the USD’s upward momentum, thereby exerting pressure on the USD/CHF pairing.
Divergent monetary policy stances between the Swiss National Bank (SNB) and the Federal Reserve contribute to the Swiss Franc’s (CHF) depreciation. Notably, the SNB’s unexpected decision in its March meeting to slash its benchmark interest rate by 25 basis points to 1.5% marked a significant move, making it the inaugural rate cut among major central banks since the onset of global disinflation in 2023. Subsequent to this announcement, the CHF extended its weakness year-to-date, with the SNB’s proactive stance potentially undermining the currency’s strength within the G10 spectrum.
While the Swiss Franc could have potentially garnered strength amidst escalating risk aversion triggered by the European Union’s (EU) initiation of investigations into tech giants like Apple, Google, and Meta on Monday, mounting geopolitical tensions between Ukraine and Russia may incentivize investors to seek refuge in safe-haven currencies such as the CHF.
