USD/CHF tumbles below 0.9580 as DXY weakens on Fed policy, US GDP eyed

• USD/CHF has surrendered the critical support of 0.9580 amid weakness in the DXY.
• A tad lower hawkish guidance and softening commentary on retail demand have weakened the greenback.
• For further guidance, investors may rely on US GDP data.

The USD/CHF pair displayed a modest rebound after hitting a low of 0.9586 in the late New York session. However, the greenback bulls have dragged the asset below Wednesday’s low at 0.9586 as investors have initiated short positions after considering the rebound a bargain sell.

The asset is prepared to deliver a fresh bearish impulsive wave as the US dollar index (DXY) has shifted into a negative trajectory after the rate hike announcement by the Federal Reserve (Fed).

It’s not the 75 basis points (bps) rate hike by the Fed, which is responsible for the plummeting DXY but its mild hawkish guidance and concerns for retail demand have forced investors to dump the safe haven. The Fed is expecting interest rate elevation to 3.5% by the end of 2022. However, positive commentary on the labor market has eased some concerns for the economy.

In today’s session, the entire focus of investors will shift to the US Gross Domestic Product (GDP) numbers. As per the market consensus, the US GDP data will shift lower to 8% against the prior release of 8.3% on a quarterly basis. While the annualized figure will significantly improve to 0.4% vs. -1.6% in the prior release.

On the Swiss franc front, investors will keep an eye on Real Retail Sales data. The economic data landed at -1.6%. The economic catalyst is expected to remain higher as soaring energy bills and prices of food products will elevate Real Retail Sales. However, a slippage in the economic data will indicate a major slump in the overall demand. This may weaken the Swiss franc bulls ahead.