USD/CHF rises to near 0.9080 amid subdued Real Retail Sales from Switzerland

• USD/CHF appreciated as the US Dollar improved after stronger US ISM data.
• Swiss Franc receives downward pressure after weaker Real Retail Sales.
• Swiss Real Retail Sales declined by 0.2% YoY in February, against the expected rise of 0.4%.

USD/CHF extends gains for the second consecutive day, advancing to near 0.9080 during the early European hours on Tuesday. The US Dollar (USD) received a boost as US Treasury bond yields surged following positive ISM Manufacturing PMI data from the United States (US), thereby supporting the USD/CHF pair.

The US Dollar Index (DXY) continues its winning streak for the fifth successive session, trading around 105.10 at the time of writing. This positive trend is attributed to traders lowering their expectations for a quarter-point interest rate cut by the Federal Reserve in its June meeting.

However, Federal Reserve Chairman Jerome Powell indicated on Friday that recent US inflation data aligns with the anticipated path, reinforcing the Fed's stance on interest rate adjustments for the year.

On the other side, Real Retail Sales (YoY) from Switzerland declined by 0.2% in February, against the expected increase of 0.4% and the previous increase of 0.3%. This lower figure has contributed to downward pressure on Swiss Franc (CHF).

The Swiss National Bank’s (SNB) statement highlighted that the easing of monetary policy was feasible due to the effectiveness of the inflation-fighting efforts over the past two and a half years.

Moreover, ING analysts anticipate two additional rate cuts from the SNB in the year 2024, barring any unexpected developments in the global economic landscape that could rapidly escalate inflationary pressures once more.