The USD/CHF pair is consistently oscillating in a narrow range below the psychological resistance of 0.9000 in the European session. The Swiss Franc asset shows a subdued performance as the upside seems capped due to non-directional performance by the US Dollar Index (DXY) and expectations of an interest rate hike by the Swiss National Bank (SNB).
S&P500 futures have returned hostile as investors are cautious ahead of Federal Reserve (Fed) chair Jerome Powell’s testimony. US equities are expected to remain volatile as a continuation of hawkish guidance from the Fed would accelerate fears of recession.
The US Dollar Index (DXY) is displaying topsy-turvy moves around 102.60. Economists at ING believe the first week of July is when we’ll get the basic set of data releases in the United States, so Powell’s words can determine whether DXY will end the quarter above or below the 102.00 mark.
Unlike the USD Index, US Treasury yields have not lost their resilience. The 10-year US Treasury yields have climbed to nearly 3.76%.
On the Swiss Franc front, the interest rate decision by the SNB will be in focus. Among G10 economies, the Swiss economy is operating at the lowest inflation levels, recorded at 2.2% in May. SNB Chairman Thomas J. Jordan is expected to raise interest rates by 25 basis points (bps) to 1.75%. Reuters reported SNB Jordan cited that “It’s vital to bring Swiss inflation to a level of price stability,” He further added it would not be a good idea to wait for inflation to rise and then raise interest rates. “When inflation remains under 2% for a long time, we don’t have a problem,”
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