Ella 
In Asia on Friday, USD/CHF attempted to rebound from a five-month low of 0.8557, trading around 0.8570. The dollar is under downward pressure due to weak U.S. economic data released on Thursday and rising market expectations for a dovish Fed rate cut in the first quarter of 2024.
The downturn in U.S. economic data has added fuel to speculation that the Federal Reserve may adopt easing policies. Data from the U.S. Bureau of Economic Analysis (BEA) showed that the annual rate of U.S. gross domestic product fell to 4.9%, compared with expectations of 5.2%. At the same time, core personal consumption expenditures (quarterly rate) fell to 2.0% from the previous value of 2.3%.
However, initial jobless claims in the United States for the week ended December 15 were 205,000, slightly below expectations of 215,000. Investors are awaiting core PCE price index data and Michigan consumer sentiment index for more signals on the state of the U.S. economy.
However, there are subtleties in Philadelphia Fed President Patrick Harker’s view. While Harker acknowledged that a rate cut would take time, he also said he was open to the prospect of a rate cut. Harker highlighted the challenges companies face in managing higher interest obligations as a key factor that could prompt a rate cut next year.
Continuing disruptions to the Suez Canal channel caused by Houthi attacks on ships in the Red Sea are fueling risk aversion. This in turn appears to be driving greater demand for the safe-haven Swiss franc. Major shipping companies including Germany’s Hapag-Lloyd and Hong Kong’s Orient Overseas (OOCL) have decided to follow British Petroleum’s lead and avoid the Red Sea channel, underscoring growing concerns about maritime security in the region .
The Swiss National Bank has taken a proactive approach in managing monetary dynamics, according to its Quarterly Bulletin published on Wednesday. The Swiss National Bank expressed its willingness to actively participate in the foreign exchange market if necessary, expressing its support for the Swiss franc (CHF).
