Ella 
USD/CHF ended a winning streak that began on January 11, with the pair trading lower during the Asian session on Tuesday, as low as 0.8670. The U.S. dollar (USD) faces challenges from falling U.S. Treasury yields. At press time, the 2-year and 10-year Treasury yields were 4.38% and 4.09% respectively.
However, the dollar found upward support after hawkish comments from Federal Reserve members. San Francisco Fed President Mary Daly said the central bank still has a lot of work to do in achieving its goal of bringing inflation back to 2.0%. Additionally, Atlanta Fed President Raphael Bostic emphasized that he was open to the prospect of adjusting the timing of rate cuts, underscoring the Fed’s commitment to a data-reliant approach. These statements drove support for the U.S. dollar.
The U.S. Dollar Index (DXY) is trading lower near 103.20. Risk aversion is driving demand for the U.S. dollar, which may be related to heightened geopolitical tensions in the Middle East. In addition, the Conference Board’s leading economic index improved to -0.1% from -0.5% in December, exceeding expectations and improving to -0.3%. Looking ahead, the Richmond Fed Manufacturing Index for January will be released later in the North American session, which will shed further light on the state of the U.S. economy.
The Swiss franc (CHF) came under selling pressure after Swiss National Bank (SNB) Chairman Thomas Jordan expressed concerns that the SNB’s ability to keep inflation in the Swiss domestic economy above zero could be affected by a stronger Swiss franc. . Recent economic indicators showed Swiss consumer prices rose slightly in December and consumer demand improved in November. These factors may influence the SNB’s decision-making at its upcoming meeting.
However, Swiss producer prices and import prices (year-on-year) fell again in December, following declines in November. These more dovish data are likely to prevent the Swiss National Bank from adjusting its monetary policy. The Swiss National Bank said in its last policy update in December that it would adjust monetary policy as necessary to keep inflation within a range consistent with medium-term price stability.
