USD/CHF defends the previous day’s bounce off three-week low while picking up bids around 96.15 after declining for the last three consecutive days. Even so, the Swiss currency (CHF) pair remains lackluster heading into Thursday’s European session.
That said, the bullish bias in the options market seems to put a floor under the USD/CHF prices of late. The daily print of the one-month risk reversal (RR) of USD/CHF, a spread between the call and puts, rose to the highest levels in three days to 0.090 by the end of Wednesday’s North American session.
On the same line could be the hawkish comments from Swiss National Bank (SNB) Chairman Thomas Jordan. SNB’s Jordan said, “Inflation data shows they need to tighten monetary policy but noted that it was unclear when they would take that step, as reported by Reuters. SNB Chairman Jordan further added that they may need to raise rates again.
It’s worth noting, however, that the US dollar’s failure to benefit from Fed Chair Jerome Powell’s Testimony exerts downside pressure on the USD/CHF prices. That said, the US Dollar Index (DXY) drops for the fourth consecutive day as Fed’s Powell considered the present monetary policy bias appropriate to battle the inflation woes.
Also weighing on the USD/CHF prices could be the US inflation expectations, as per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, which dropped for the third consecutive day to the fresh low since late February, at 2.54% by the end of Wednesday.
Also read: USD/CHF Price Analysis: Stability below inverted flag warrants downside to near 0.9450
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