- USD/CHF sees a limited rebound on Friday after hitting four-month lows on Thursday.
- SNB no longer focusing on forex sales after latest rate decision.
- Coming up next week: SNB Quarterly Bulletin, US GDP & PCE.
The USD/CHF is drifting back towards the 0.8700 handle on Friday after a tense week that saw the Swiss Franc (CHF) gain another one and a quarter percent on the US Dollar (USD) from Monday's opening bids.
The pair is down nearly 1.5% from last week's peak bids near 0.8820, and Friday's limited gains are barely pulling the pair off the floor after closing down for the last four consecutive trading days.
The Swiss National Bank (SNB) is caught in the middle, holding interest rates in place for the second consecutive rate call, with inflation drifting towards the SNB's targets and Swiss Gross Domestic Product (GDP) growth projected to slow.
SNB's Jordan: We are no longer focusing on forex sales
SNB Chairman Thomas Jordan noted on Thursday that the SNB is no longer focusing directly on forex operations to try and keep the CHF from appreciating further. Despite markets ratcheting up expectations of rate cuts as soon as next March, the SNB Chair noted that when it comes to monetary policy, the SNB is more likely to resume selling currency reserves directly before looking at beginning rate cuts.
US economic data mixed on Friday, With the S&P Global Manufacturing Purchasing Managers' Index (PMI) for December missing expectations to print at 48.2 versus November's 49.4, missing the median market forecast of a slight decline to 49.3.
Read More: SNB softened its language on FX reserve sales - Nomura
The US Services PMI firmly surprised to the upside, coming in at a robust 51.3, completely stepping over the market's forecast backslide to 50.6 from the previous month's 50.8.
Coming up next week, the SNB posts its Quarterly Bulletin for the fourth quarter of 2023 on Wednesday, followed by US GDP figures on Thursday. The Federal Reserve's policy pivot and updated dot plot of interest rate expectations faces its first challenge, when US Personal Consumption Expenditure (PCE) numbers for November print next Friday.
Annualized US GDP for the third quarter is expected to hold steady at 5.2%, while median market forecasts are calling for a slightly decline in PCE for the year into November from 3.5% to 3.4%.
USD/CHF Technical Outlook
USD/CHF's Friday rebound is on the anemic side, barely keeping the US Dollar within Thursday's daily range as short pressure remains. Bidders will need to adjust their expectations and celebrate recapturing the 0.8700, assuming buyers are able to muscle the pair over the target price level before markets wrap up trading action for the week.
The pair is down over two percent peak-to-trough from last weak's top bids at 0.8816, and the USD/CHF is in the red nearly five percent from November's high of 0.9112.
The 50-day and 200-day Simple Moving Averages (SMA) have completed a bearish crossover near the 0.8950 price level, and potential topside momentum will be capped off by the 50-day SMA descending into the 0.8900 handle.
USD/CHF Daily Chart
USD/CHF Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds position around 1.0850 due to bullish bias
EUR/USD halts its seven-day winning streak, trading around 1.0830 during the early Monday. The renewed demand for the US Dollar puts pressure on the pair. However, the decline in the US Treasury yields could limit the upside of the Greenback and put pressure on the pair.
GBP/USD loses traction near 1.2800 amid modest recovery of US Dollar
GBP/USD trades on a softer note near 1.2805, snapping the seven-day winning streak during the early Monday. The recovery of the Greenback drags the major pair lower. However, the downside for the pair might be limited amid the rising bet that the Federal Reserve will cut the interest rate in the third quarter.
Gold down but not out, as upside bias stays intact
Gold price is correcting lower from near six-week highs of $2,393 set on Friday, despite a broadly subdued US Dollar. A modest recovery in the US Treasury bond yields and China’s pause on Gold buying for the second consecutive month in June.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Bitcoin falls below $55,000 level
Bitcoin dropped below $56,552 on Sunday, disrupting market structure and signaling a bearish outlook. Ethereum and Ripple also revisited their support levels, slipping below critical thresholds, indicating a possible downtrend for these assets in the days ahead.
French election: It’s all over for Marine Le Pen, but the left weighs on the Euro
The deciding vote in the French Parliamentary elections closed this evening, and the exit poll suggests a shock result. The winning party is the left alliance, the popular front, which was pulled together to try and keep Le Pen’s far right National Rally party out of power.