Anna 
The USD/CHF pair is making efforts to recover from its recent losses, slipping near 0.8730 during the European trading hours on Thursday. The Swiss Franc (CHF) gained strength against the US Dollar (USD) amid an improved risk appetite. The subdued US bond yields are further contributing to the decline of the Greenback.
The US Dollar Index (DXY) is hovering around 104.10, with the 2-year and 10-year yields on US bond coupons standing at 4.42% and 4.11%, respectively. Despite the hawkish stance taken by the US Federal Reserve (Fed) after its January interest rate decision, market sentiment seems to be avoiding the strength of the USD.
Federal Reserve Chair Jerome Powell emphasized the commitment to maintaining elevated interest rates for an extended period and dismissed the possibility of a rate cut in March. Powell stressed the importance of monitoring inflation for its sustainable return to the 2% target.
Switzerland’s January non-seasonally adjusted Unemployment Rate rose to 2.5% year-on-year, up from the previous figure of 2.3%. The seasonally adjusted Unemployment Rate remained unchanged at 2.2% month-on-month, meeting expectations.
The Swiss National Bank (SNB) opted to keep its key interest rate at 1.75%, indicating the conclusion of its recent tightening phase. The strengthened Swiss Franc has helped control inflation by reducing expenses related to imported goods and services. Forecasts for the current year anticipate inflation remaining below the 2.0% threshold, leading to expectations that the SNB could introduce its first rate cut in September 2024.
