Ella 
USD/CHF attracted some bargain hunting around 0.9045 in Asia on Monday and hit its highest level since June 13. USD/CHF is currently trading around the 0.9075-0.9080 area and appears poised to build on last week’s momentum above the key 200-day simple moving average (SMA) level.
The prospect of further policy tightening from the Federal Reserve (Fed) has helped the US dollar (USD) stabilize near six-month highs, thus acting as a tailwind for USD/CHF. In fact, the Fed last week reiterated its rhetoric of “keeping interest rates high for longer,” warning that inflation remains weak and could tempt the central bank to raise interest rates at least once before the end of the year.
Additionally, the so-called “dot plot” shows the Fed will cut interest rates only twice in 2024, compared with four previously expected cuts. That led to a broad sell-off in U.S. fixed-income markets, pushing the rate-sensitive two-year Treasury yield to its highest level since 2007. Additionally, 10-year U.S. Treasury yields are near 16-year highs, providing support for USD/CHF.
On the other hand, the Swiss franc continues to be weighed down by the Swiss National Bank (SNB), which last week ended five consecutive interest rate hikes. The Swiss National Bank decided to keep its benchmark interest rate unchanged at the end of its quarterly monetary policy meeting, defying market expectations for a 25-basis-point hike amid inflation below 2% and weak recent economic data.
This, coupled with USD/CHF being above the key 200-day moving average, supports the prospect of USD/CHF continuing the uptrend established over the past two-plus months. With no important data released in the United States on Monday, U.S. bond yields will continue to play an important role in affecting the fluctuations of the U.S. dollar and provide some new impetus for USD/CHF.
