The USD/CHF pair saw an increase as the US Dollar strengthened following positive US ISM data. Conversely, the Swiss Franc faced downward pressure after a decrease in Real Retail Sales by 0.2% YoY in February, contrary to the expected rise of 0.4%.
During early European trading on Tuesday, USD/CHF continued to rise, reaching near 0.9080. This was supported by a surge in US Treasury bond yields after encouraging ISM Manufacturing PMI data from the US.
The US Dollar Index (DXY) maintained its positive trend for the fifth consecutive session, hovering around 105.10. This was driven by reduced expectations for a rate cut by the Federal Reserve in June.
Federal Reserve Chairman Jerome Powell emphasized that recent US inflation data aligns with expectations, reinforcing the Fed’s stance on interest rates for the year.
On the other hand, Swiss Real Retail Sales showed a decline of 0.2% in February, falling short of the anticipated 0.4% increase. This contributed to the weakening of the Swiss Franc.
The Swiss National Bank (SNB) stated that the easing of monetary policy was possible due to effective inflation-fighting measures over the past two and a half years.
ING analysts predict two more rate cuts from the SNB in 2024, unless unexpected global economic developments lead to a rapid increase in inflationary pressures.