USDCHF Analysis – January-10-2024

Swiss Franc Fluctuates Against the Dollar
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Bloomberg – The Swiss Franc recently dipped to 0.85 against the US dollar, retreating from an impressive 12-year peak of 0.841 on the last trading day 2023. This shift came amidst a surge in the DXY, overshadowing the Franc’s notable 8.5% gain against the dollar over the past year. The contrasting monetary approaches of the Swiss National Bank and the US Federal Reserve played a vital role in this scenario.

The US Federal Reserve’s latest meeting hinted at a more cautious stance, particularly in light of fresh reports indicating a slowdown in US inflation. This news exerted pressure on the US dollar. Meanwhile, even with Switzerland experiencing a deceleration in inflation, the Swiss National Bank remains vigilant. The inflation rate in Switzerland, recorded at 1.4% in November, is anticipated to edge closer to the bank’s 2% target by mid-2024. This outlook is shaping investor expectations that the Swiss National Bank’s rate cuts will likely trail behind those of the US Federal Reserve.

Adding to this complex currency dance, the Swiss Franc also soared to an all-time high against the Euro, the currency of its neighboring countries. This was primarily fueled by prolonged expectations of higher interest rates maintained by the Swiss National Bank. Such dynamics underscore the intricate interplay of global monetary policies and their impact on currency valuations.

USDCHF Analysis - January-10-2024

USDCHF 4-Hour Chart