USD/CHF drops from above 0.9300 as US Dollar corrects, risk-off profile still solid

• USD/CHF is struggling to capture 0.9300 despite downbeat market sentiment.
• S&P500 faced intense selling pressure amid mounting recession risks.
• SNB Jordan hiked interest rates by 50 bps, as expected, to 1% to keep inflation stable at around 2%.

The USD/CHF pair has been struggling to sustain above the immediate hurdle of 0.9300 in the early Asian session. The Swiss Franc major asset witnessed a strong reversal in the New York session amid negative market sentiment, which improved the appeal for safe-haven assets. At the press time, the major has dropped to near 0.9276 but is expected to find support ahead.

S&P500 faced severe pressure on Thursday amid mounting recession risk as an interest rate peak projection above 5% is sufficient to create havoc among firms that are debt-laden. Also, companies would prefer to postpone their expansion plans to dodge higher interest obligations. No doubt, the United States Consumer Price Index (CPI) data has softened but the battle against stubborn inflation is far from over.

The US Dollar Index (DXY) has corrected marginally after a rally to near 104.80. The corrective move doesn’t seem to be a reversal for now and the USD Index may resume its upside journey ahead. Meanwhile, the 10-year US Treasury yields are continuously facing pressure and have dropped to near 3.45%.

The asset displayed some volatility on Thursday after the Swiss National Bank hiked its interest rates by 50 basis points (bps), as expected, to 1%. SNB Chairman Thomas J. Jordan is required to avoid sheer divergence in the policy rate with European Central Bank (ECB). Also, Switzerland's inflation rate is comfortably above 2%, which is needed to remain stable.