Swiss Franc remains near 16-month lows against US Dollar
USD/CHF inches lower after reaching nearly 16-month highs the previous day, trading around 0.8250 during the Asian hours on Thursday.
The Swiss Franc (CHF) continues to hover near 16-month lows against the US Dollar (USD), trading around 0.8250 during Thursday's Asian trading hours. This decline may be short-lived, as the US Dollar strengthens further, potentially due to additional rate hikes by the Federal Reserve (Fed). The Greenback's position is bolstered by the central bank's recent 25 basis point increase to a target range of 3.75% to 4.00%, marking the Fed's first rate hike in three years.
Fed Chair Kevin Warsh indicated that additional rate hikes could still occur to address persistent inflation. Market sentiment suggests a roughly 49.8% probability of another Fed rate hike at their October meeting, according to the CME FedWatch tool. The Swiss National Bank (SNB) is still not planning to raise interest rates in 2023, making the CHF a potential funding currency for investors seeking low-yielding assets.
While the Franc is typically viewed as a safe-haven currency, Rabobank warns that heightened market anxieties could lead to a surge in long positions, potentially reversing its safe-haven appeal.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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