The USD/CHF pair fell below the 0.9100 support level in Thursday’s European session, with the Swiss Franc under pressure due to a drop in the US Dollar. The US Dollar weakened as traders adjusted their expectations for interest rate changes by other central banks. Federal Reserve Chair Jerome Powell hinted at keeping rates higher for a longer period, leading to a rethink by traders who had bet on rate cuts by central banks like the BoE and RBNZ.
On the other hand, riskier assets were in demand, with S&P 500 futures showing gains and US Treasury yields correcting to 4.57%. The US economy’s strength, including robust growth, low unemployment, and strong consumer spending, contrasted with other economies facing recession risks.
Investors may see an opportunity to go long on the Swiss Franc in the short term, especially with expectations that the SNB could lower interest rates further. With Swiss inflation below target, policymakers have room to reduce borrowing costs.