Anna 
During the early European trading hours on Wednesday, the USD/CHF pair demonstrated slight gains near 0.9085. The US Dollar (USD) rebounded, supported by hawkish statements from Federal Reserve (Fed) officials, which tempered expectations of potential interest rate cuts in 2024. Attention is now focused on forthcoming speeches by Fed members Philip Jefferson, Susan Collins, and Lisa Cook later today.
Minneapolis Federal Reserve President Neel Kashkari’s comments on Tuesday leaned towards a more hawkish stance, contributing to broad strength in the Greenback. Kashkari emphasized that it is premature to conclude that inflation has stalled and hinted that the Fed might refrain from interest rate cuts this year if price pressures continue to ease.
Traders have adjusted their expectations for Fed rate cuts this year, with the probability of a 25 basis points (bps) rate cut in September now at 65.7%, according to CME’s FedWatch Tool. Market sentiment will likely be swayed by the initial release of the US University of Michigan Consumer Sentiment Index on Friday, which is anticipated to dip to 76.0 in May from the previous reading of 77.2.
On the geopolitical front in Switzerland, uncertainty surrounds ceasefire talks between Israel and Hamas. Despite Hamas agreeing to a ceasefire plan on Monday, Israel’s war cabinet opted to prolong military action against Hamas, with Israeli forces conducting strikes in Gaza’s southernmost city. Israel cited dissatisfaction with the ceasefire terms, as reported by the New York Times. Escalating tensions in the Middle East could lead to increased safe-haven flows, potentially benefiting the Swiss Franc (CHF) against the USD.
