Swiss Franc Trims Gains, Market Awaits US Inflation Data
Newsmaker.id - The Swiss franc pared some of its initial gains against the US dollar in trading on Friday (July 10th). The USD/CHF pair regained ground after being under pressure, while market participants opted for caution ahead of the release of US inflation data next week.
Early in trading, the franc received support from demand for safe-haven assets amid uncertainty over the conflict between the United States and Iran. However, hopes that regional mediators could revive diplomatic channels began to ease market concerns and limit demand for safe-haven currencies.
The US dollar also began to recover after experiencing pressure in recent sessions. Although the minutes of the Federal Open Market Committee meeting were deemed less restrictive than expected, expectations that the Federal Reserve still has the potential to maintain a tight monetary policy helped limit the greenback's weakness.
Market attention is now focused on the US Consumer Price Index data. Higher-than-expected inflation could strengthen speculation about a Fed rate hike, push up US bond yields, and support USD/CHF gains. Conversely, weaker data could potentially put further pressure on the dollar and boost the Swiss franc.
In Switzerland, relatively low inflation has allowed the Swiss National Bank to maintain a more relaxed interest rate policy. Swiss inflation in June was recorded at around 0.5%, still within the SNB's price stability range, while the central bank maintained its benchmark interest rate at 0%. (CP)
