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USD/CHF hits two-week high on oil-driven Fed hike bets

Traders are pricing nearly an 80% chance the Fed raises borrowing costs at least once by year end, while oil volatility linked to Middle East tensions keeps inflation concerns elevated.

Reported · Written up by our desk · Major Pairs

The Swiss franc weakened to a two-week low against the US dollar, with USD/CHF extending its weekly uptrend for a fourth straight day and rising to about 0.8045 during the Asian session, according to FXStreet.

The move was supported by a firmer USD and by shifting expectations for US monetary policy. FXStreet pointed to investors focusing on oil-price driven inflation risks after the initial reaction to the in line US CPI report faded.

FXStreet also tied the currency backdrop to Middle East risk, citing uncertainty around the Strait of Hormuz and escalations involving Iran-backed Houthis that have pushed up war risk premiums and kept crude prices volatile.

Looking ahead, FXStreet said traders are set to watch the US data calendar, including Producer Price Index and Weekly Initial Jobless Claims, alongside speeches from FOMC members, to help determine further USD demand for the USD/CHF pair.

Latest closeWTI crude $82.68 ▼0.6%

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