USD/CHF maintains position above 0.9000 on stronger US Dollar

• USD/CHF consolidates post-intraday gains on improved US bond yields.
• Improved market sentiment weighs on the Swiss Franc (CHF).
• Minneapolis Fed President Neel Kashkari's comments propel Greenback's upward momentum.

USD/CHF retraces recent losses, trading higher around 0.9020 during the European session on Wednesday. The pair receives upward support due to the rebound in the US Dollar (USD) on the back of improved US Treasury yields.

On Tuesday, Switzerland's seasonally adjusted Unemployment Rate (MoM) remained consistent at 2.1% in October. Additionally, the conflict between Israel and Hamas initially influenced the USD/CHF pair, with capital possibly moving towards the safe-haven CHF. However, the situation in the Middle East is now contained, improving market sentiment and potentially prompting a capital shift from the Swiss Franc to riskier assets.

Market speculation is swirling around the possibility of the US Federal Reserve (Fed) halting interest rate hikes. This sentiment is fueled by the recent disappointing Non-Farm Payrolls data and the dovish stance taken by the Fed in November. However, the US Dollar (USD) is gaining strength as Treasury yields recover from previous losses, with the 10-year US bond yield currently at 4.60%.

The Greenback's upward momentum received a boost after comments from Minneapolis Fed President Neel Kashkari, who cautioned against prematurely declaring the end of the Fed's rate hike cycle. Kashkari expressed doubts about the adequacy of current policy in the face of a robust economy, suggesting that a potential rise in inflation could warrant additional tightening.

Furthermore, Chicago Fed President Austan Goolsbee acknowledged progress in managing inflation and hinted at a shift in focus towards determining the duration for which interest rates should be maintained at their current level.

Investors are eagerly awaiting further insights into the potential trajectory of interest rates, with Fed Chairman Jerome Powell set to speak at a conference in Washington, DC, hosted by the Division of Research and Statistics.