Anna 
In Monday’s European session, the USD/CHF pair hovered near a six-month high around 0.9150. The Swiss Franc asset is poised to continue its upside momentum as the US Dollar strengthens amid concerns over potential escalation in Middle East tensions and diminished expectations of Federal Reserve (Fed) interest rate cuts at the upcoming June meeting.
Significant gains in S&P 500 futures during the European session suggest some improvement in investors’ risk appetite. However, there are fears that risky assets could retreat amidst concerns of possible retaliation by Israel following an airstrike by Iran, which saw the launch of hundreds of drones and missiles.
Meanwhile, 10-year US Treasury yields surged to 4.55% as the Fed shows no urgency to lower interest rates, given persistently high inflation. Speculation regarding rate cuts in the June and July meetings has waned, with investors now anticipating potential rate cuts in the September meeting.
The US Dollar Index (DXY) turned sideways after hitting a five-month high near 106.00. Today’s focus for investors will be on the release of monthly Retail Sales data for March at 12:30 GMT. Projections suggest a slower growth pace of 0.3%, down from the previous reading of 0.6%, which could alleviate concerns surrounding stubborn inflation.
Conversely, the Swiss Franc remains under pressure as the Swiss National Bank (SNB) is anticipated to cut interest rates again at the June meeting, given that inflation has consistently fallen below 2%.
Confidence in further easing of price pressures has strengthened following moderate growth in Swiss Producer and Import Prices in March. While monthly producer inflation increased steadily by 0.1%, annual Producer and Import prices contracted at a higher pace of 2.1%, compared to the previous reading of 2.0%.
