- USD/CHF may recover as the US Dollar steadies following recent gains.
- US Dollar may further strengthen as Fed officials consider further rate hikes if inflation stays above target.
- SNB Vice-President Antoine Martin reiterated readiness to intervene to prevent excessive Swiss Franc appreciation.
USD/CHF inches lower after registering 0.25% gains in the previous session, trading around 0.7810 during the Asian hours on Friday. The pair may recover as the US Dollar (USD) gains support from fading expectations for Federal Reserve (Fed) rate cuts amid surging Oil prices driven by the Middle East conflict. Additionally, Fed officials continue to consider the possibility of further rate hikes if inflation remains above target.
The Iran war entered its seventh day, with Iran launching missiles and drones across the Gulf on Thursday, striking an oil refinery in Bahrain, while Israel continued airstrikes on Tehran, and the US suspended operations at its embassy in Kuwait.
Chicago Fed President Austan Goolsbee said on Friday that institutions are facing a crisis of trust. Goolsbee added that the federated structure of the central bank has worked well, adding that Fed independence is critically important to controlling inflation.
Traders await US labor data, including US Nonfarm Payrolls (NFP), where consensus expectations are around 59K for February, following January’s above-trend reading of 130K. Retail Sales are expected to fall 0.3% month-over-month in January, after a flat reading in the previous month.
The Swiss Franc (CHF) may strengthen against the US Dollar on safe-haven demand amid heightened geopolitical tensions. Meanwhile, Swiss National Bank (SNB) Vice-President Antoine Martin reiterated the central bank’s readiness to intervene to prevent excessive CHF appreciation.
