USD/CHF reclaims 0.9000 as SNB’s surprise rate cut keeps Swiss Franc on backfoot

• USD/CHF rebounds to 0.9000 on broader weakness in the Swiss Franc due to SNB’s surprise rate-cut decision.
• Fed policymakers remain confident about easing price pressures.
• Market participants await the US core PCE inflation data for fresh guidance.

The USD/CHF pair recaptures the psychological resistance of 0.9000 in the European session. The Swiss Franc asset rebounds despite the US Dollar easing after refreshing its monthly high. Weak Swiss Franc due to the surprise rate cut decision by the Swiss National Bank (SNB) reinforces demand for the pair.

Last week, the SNB announced a rate cut by 25 basis points (bps) to 1.50%, while investors anticipated that interest rates would remain unchanged. The SNB became the first among central banks of developed nations to kick off the rate-cut cycle.

S&P 500 futures have posted decent gains in the London session, portraying an improvement in the risk appetite of the market participants. The US Dollar Index (DXY) falls to 104.10 as Federal Reserve (Fed) policymakers remain confident that the underlying inflation is easing despite price pressures remaining stubborn in January and February. 10-year US Treasury yields have dropped to 4.25% due to firm expectations that the Fed will start reducing interest rates from the June policy meeting.

Higher house rentals significantly drive the US inflation but policymakers are confident that inflation will come down to 2%. Chicago Federal Reserve Bank President Austan Goolsbee said on Monday, in an interview with Yahoo Finance, "So we're in an uncertain state but it doesn't feel to me like we've changed fundamentally the story that we're getting back to target," Austan Goolsbee predicted three rate cuts for this year in the March monetary policy.

This week, the next move in the US Dollar will be guided by the US core Personal Consumption Expenditure price index (PCE) for February, which will be published on Friday.