Anna 
During the Asian trading session on Friday, USD/CHF demonstrated consolidation around the 0.8670 level. The US dollar gained against the Swiss franc following the release of better-than-expected US gross domestic product (GDP) data. The strong Q4 GDP figures may have reduced the likelihood of the Federal Reserve (Fed) implementing policy rate cuts at its March meeting, providing support for USD/CHF.
The Q4 US GDP recorded a year-on-year growth of 3.3%, surpassing the previous value of 4.9% and exceeding the market consensus of 2.0%. Additionally, the US GDP price index for the fourth quarter showed a growth of 1.5%, down from 3.3% in the previous month. In an unexpected development, initial jobless claims in the US fell to 214,000 in the week ending January 19, contrary to expectations for a rise from 189,000 to 200,000. Traders will closely monitor the release of the personal consumption expenditures (PCE) price index data on Friday for further insights into the US economic condition.
The Swiss franc’s appreciation supports the Swiss National Bank (SNB) in curbing inflation. However, uncertainties exist regarding whether the SNB can tolerate prolonged strength in the Swiss franc. Earlier this week, SNB President Thomas Jordan acknowledged that the robust Swiss franc played a role in controlling inflation but also posed challenges for domestic businesses.
Despite concerns about the Swiss franc’s strength, the SNB is not expected to intervene in open markets through foreign exchange purchases to limit its appreciation. Central bankers are likely to focus on key economic indicators like real retail sales and the ZEW survey to assess the Swiss economy’s health, aiding in determining the SNB’s monetary policy.
