Ella 
During the Asian session on Thursday, USD/CHF fell to around 0.8620. USD/CHF retreated as the U.S. dollar (USD) declined despite rising U.S. Treasury yields. As of press time, the yields on 2-year and 10-year U.S. bonds were 4.36% and 3.86% respectively.
The U.S. Dollar Index (DXY) is trading around 102.30, with dovish sentiment surrounding the Federal Reserve’s interest rate trajectory in early 2024 appearing to be weighing on the greenback. The dollar remains under downward pressure even as Federal Reserve officials urge caution and discourage premature speculation.
However, improving U.S. economic data on Wednesday found support for the dollar. U.S. existing home sales rose 0.8% monthly in November, rebounding sharply from the previous decline of 4.1%. In addition, the Conference Board’s consumer confidence index increased significantly in December, rising from 101.0 to 110.07, marking the largest increase since the beginning of 2021.
Market participants are awaiting Thursday’s U.S. third-quarter annual GDP growth rate, jobless claims and the Philadelphia Fed manufacturing survey for more clues about the U.S. economy.
At its December meeting, the Swiss National Bank (SNB) chose to keep its policy rate unchanged at 1.75%. According to the “Quarterly Announcement” released on Wednesday, SNB’s sight deposits with the central bank accrue interest at the SNB policy rate within a certain threshold, and 1.25% above the threshold. In addition, the SNB also expressed its willingness to actively participate in the foreign exchange market when necessary, which demonstrates its active stance in managing currency dynamics.
Inflationary pressures have declined slightly over the past quarter, but uncertainty about the economic situation remains high. Inflation was 1.4% in November, down slightly from previous months. However, inflation is expected to rise again in the coming months. Reasons for the expected increase in inflation include rising electricity prices, rising rents and the impact of an increase in value-added tax (VAT).
