Swiss Franc declines as US Dollar strengthens on rising Fed hike bets
USD/CHF gains ground for the third consecutive day, trading around 0.8140 during the Asian hours on Friday. The pair appreciates as the US Dollar (USD) gains ground as expectations grow for a Federal Reserve (Fed) rate hike in September.
The Swiss Franc experienced a decline as the US Dollar strengthened due to expectations of a Federal Reserve rate hike this September. The likelihood of a 25-basis-point increase next week surged to over 72% according to the CME FedWatch Tool, up from 61% previously. Investors are also watching the upcoming US consumer price index report, which could bolster these tightening expectations.
The US Producer Price Index (PPI) rose 5.4% year-over-year in August, surpassing analyst forecasts of 5.3%. Meanwhile, the Swiss Franc is under pressure due to a widening interest rate gap between Switzerland and the United States. While other central banks are tightening monetary policy, the Swiss National Bank (SNB) has kept its key rate at 0% through the end of the year.
However, a significant drop for the Swiss Franc is likely to be mitigated by shifts in global currency markets. In response to hawkish expectations from the Bank of Japan and joint Yen-buying interventions by the US and Japan, traders are moving away from the Yen and into the Swiss Franc, making it an attractive safe-haven currency.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
- Japanese Yen edges higher as PPI reaffirms BoJ rate hike bets and USD bulls await US CPI fxstreet.com
- Bitcoin dips to $77.1k as PPI data boosts Fed rate hike bets, oil prices jump investing.com
- What a Fed rate hike actually means for the U.S. economy and inflation financialpost.com
- Bitcoin below $77,000, Zcash leads losses as traders bet on a Fed rate hike coindesk.com
