The USD to CHF rate pair has unfortunately lowered as the USD has proven to be somewhat weak recently. It has gone down 0.2% over the first day this week overall. The dip was not huge but notable for day traders. 1 USD to CHF has so far stayed above 0.89 in the Asian session.
The US Dollar Index (DXY) has been doing well for several months now. It compares the dollar against a number of other currencies and gives an average. DXY has now finally dropped after a 6-month run, and this has had an effect on the USD/CHF pair. The reason for the dollar finally succumbing to downward pressure may be due to other currencies. The Japanese Yen has gained a huge amount of demand recently, following a statement from the Bank of Japan regarding their intentions, being rather hawkish. This likely affected the dollar and the CHF exchange rate in comparison.
What’s Next for The USD to CHF
The Fed may respond to this, however, and we will see if the negative trend will continue for the dollar. Those trading the dollar and keeping a close eye on Fed activity believe they will try to support the dollar. Most likely, they think we will see interest hikes continuing for short-term support, with a 25 bps rise overall. Traders do feel confident in this bet, according to a recent WSJ report. It stated that certain Fed officials stated they wanted to keep raising interest rates. They would prefer to raise it in the short term and cut it later if need be.
This should help US Treasury bond yields and push the US dollar up. As one can imagine, this will have an impact on the USD to CHF rate. Therefore, it would be wise to remain cautious about this pair for now, as this dip may only be temporary. It may not be an indicator of things to come.
