The USD/CHF pair remained on the defensive heading into the North American session and was seen trading around the 0.9570 region, or a fresh one-month low.
Minutes from the May 3-4 FOMC meeting released on Wednesday suggested that the Fed could pause the rate hike cycle after two 50 bps hikes each in June and July amid the worsening economic outlook. The speculations were reinforced by the recent slump in the US Treasury bond yields to a multi-week low, which, in turn, weighed on the US dollar and exerted downward pressure on the USD/CHF pair.
That said, the risk-on impulse - as depicted by a generally positive tone around the equity markets - undermine the safe-haven Swiss franc and held back traders from placing aggressive bearish bets around the USD/CHF pair. Apart from this, a modest USD rebound from a fresh monthly low helped limit any further losses, at least for the time being, though any meaningful recovery still seems elusive.
Market participants now look forward to the release of the US April Core PCE Price Index - the Fed's preferred inflation gauge. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to the USD/CHF pair. Traders will further take cues from the broader market risk sentiment to grab short-term opportunities on the last day of the week.
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