Ella 
In the Asian market on Tuesday, USD/CHF recovered last Friday’s losses and rose to around 0.8450. The U.S. dollar gained upward support at the beginning of the year, with the U.S. dollar index rising above 101.50.
Given recent declines in U.S. labor data, core PCE inflation, and annualized GDP, market participants may remain cautious before buying into the U.S. dollar (USD). These indicators support the view that the U.S. economy slowed in the fourth quarter and may be heading for a soft landing. This further strengthens the argument for a Fed rate cut in 2024, putting bearish pressure on the dollar.
On Friday, the Chicago Purchasing Managers Index released by ISM-Chicago showed that business conditions in the Chicago area fell to 46.9 in December from the previous value of 55.8, exceeding the expected value of 51.0. The ISM manufacturing purchasing managers’ index and Fed meeting minutes are scheduled to be released on Wednesday.
The Red Sea crisis could exacerbate risk aversion, increasing demand for the safe-haven Swiss franc (CHF). Houthi militants attacked a Maersk container ship on Sunday, but the attack was thwarted by U.S. helicopters. After the incident, Iran dispatched a warship to the Red Sea. The situation threatens disruption to important oil shipping waterways, including the Red Sea and the Strait of Hormuz in the Gulf.
The Swiss ZEW survey expectations indicator released last week recorded -23.7 in December, compared with -29.6 in November. To the surprise of the market, the Swiss KOF leading indicator rose to 97.8, beating expectations of 97.0. Looking ahead, the SVME Manufacturing Purchasing Managers’ Index is set to be released on Wednesday, which will add a new dimension to the economic indicators.
The Swiss National Bank (SNB) appears ready to take a proactive stance, as reflected in the central bank’s recent quarterly announcement. The Swiss National Bank expressed its willingness to actively intervene in the foreign exchange market to provide support for the Swiss franc.
