Ella 
USD/CHF fell for a second consecutive day on Thursday and fell below the psychological 0.8500 mark during the Asian session. However, USD/CHF remains within the range that it has been trading within for more than two weeks, with investors waiting to see U.S. inflation data before moving in a new direction.
As the Federal Reserve’s (Fed) interest rate cut path remains unclear, the U.S. dollar remains within a one-week range and weighs on USD/CHF. In other words, U.S. macro data emphasizes the resilience of the U.S. economy. That, combined with unclear policy signals from several Fed officials, has forced investors to scale back expectations for more aggressive policy easing in 2024.
In fact, New York Fed President John Williams said on Wednesday that the U.S. central bank is now in a “good position” and has time to consider the next move for interest rates, but will ultimately need to return policy to a more neutral level. In contrast, Atlanta Fed President Raphael Bostic noted earlier this week that the central bank still needs to give time for tightening policy to create room for inflation to fall back (inflation falls more than expected) and expected Two interest rate cuts will be implemented before the end of the year, each by 25 basis points.
Still, the reduced likelihood of an imminent Fed rate cut in March has kept the 10-year Treasury yield steady above the 4.0% threshold and supported the prospect of some dollar dip buying. Beyond this, overall stock market strength could weigh on the safe-haven nature of the Swiss franc (CHF) and help limit further losses in USD/CHF, so aggressive bearish traders should proceed with caution.
Investors may also prefer to wait for the latest U.S. consumer inflation data to be released later in the morning in North America, which will influence the Federal Reserve’s future interest rate decisions. This, in turn, will play a key role in driving demand for the U.S. dollar and determining the market outlook for USD/CHF.
