USD/CHF Reversal! US Dollar Poised to Rebound, Franc Under Pressure
The USD/CHF pair pared previous gains and traded around 0.8020 during Friday's Asian session. Although slightly weaker, this decline is expected to be limited as the US dollar has the potential to strengthen again. Market sentiment has become more cautious as attention increases on the direction of Federal Reserve (Fed) policy.
Support for the dollar came from better-than-expected US Initial Jobless Claims data. Claims fell to 198,000, lower than the expected 215,000, indicating a still-strong labor market. This condition reinforces the view that the Fed will keep interest rates unchanged in the coming months. The CME FedWatch tool shows a 95% chance of keeping interest rates unchanged at the January 27-28 meeting, while expectations of a rate cut have been pushed back to June.
Meanwhile, the Swiss franc, as a safe-haven asset, is starting to lose its appeal. The easing of geopolitical tensions related to Iran and US President Donald Trump's statement that he will not remove Fed Chair Jerome Powell have helped improve market sentiment. This situation has prompted investors to return to the US dollar, adding to the short-term pressure on the CHF. (az)
Source: Newsmaker.id
