Forex
Home›Forex›Major Pairs›USD/CHF softens as franc firms ahead of June trade bal…
USD/CHF softens as franc firms ahead of June trade balance data
The Swiss National Bank has reiterated readiness to intervene to prevent franc overappreciation, while Fed pricing shows a 61.4% chance of a rate hike in September.
USD/CHF extended gains for the Swiss franc for a second straight day, trading around 0.8070 in Asian hours as the pair weakened ahead of Switzerland’s June trade balance release, FXStreet reported.
FXStreet said the Swiss franc received support despite the SNB maintaining its medium term inflation outlook, with recent meeting minutes showing policymakers are growing more cautious. The central bank also reiterated it is prepared to intervene in the foreign exchange market to prevent the franc from overappreciating and to protect price stability.
Meanwhile, the US dollar struggled as escalating US Iran hostilities weighed on risk sentiment and as markets looked ahead to the Federal Reserve, which is widely expected to hold interest rates steady at its upcoming meeting. According to FXStreet, the CME FedWatch Tool priced a 61.4% probability of a September rate hike.
FXStreet added that the Fed communication backdrop was leaning hawkish, citing a more hawkish than usual message from Fed’s Hammack and an increase in the FXS Fed Sentiment Index to 128.64. The report said persistently high inflation was framed as the bigger concern, limiting near term expectations for aggressive rate cuts and supporting the US dollar on balance, even as USD/CHF still softened.