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USD/CHF remains comfortable above 0.9000 as the focus shifts to Fed monetary policy.
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The market mood remains vulnerable as the Israeli army is all set for a ground assault in Gaza.
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Investors await the Fed policy and the speech from SNB Jordan.
The USD/CHF pair traded above and behind the psychological resistance of 0.9000 in the early European session. Swiss franc assets are aiming to extend gains as investors remain cautious ahead of the Federal Reserve’s (Fed) interest rate decision, which is scheduled for Wednesday.
S&P500 futures gave up some losses in the Tokyo session, indicating a risk-off mood amid geopolitical tensions. The Israeli army is preparing for a ground attack on Gaza to destroy the Palestinian military in retaliation for Hamas airstrikes since October 7.
The US Dollar Index (DXY) is struggling to move higher above 106.40 as a neutral interest rate decision from the Fed is widely expected. However, the outlook remains bleak due to firm consumer spending, strong labor market conditions and possible signs of recovery in the manufacturing and services sectors.
Market participants expect additional price pressures above the 2% inflation target to be the most stubborn as the US economy remains resilient despite higher borrowing costs. Therefore, hawkish guidelines would be appropriate. In addition to easing price pressures, higher US long-term bond yields are allowing Fed policymakers to keep interest rates steady. The 10-year US Treasury yield rose to around 4.88%.
On the Swiss Franc front, investors await the speech from Swiss National Bank (SNB) Chairman Thomas J. Jordan, which is scheduled for Wednesday. SNB Jordan is expected to discuss about keeping interest rates unchanged at 1.75% for a longer period to ensure price stability. This week, the Swiss inflation data for October will be keenly watched.
USD/CHF
