Market Analysis

USDCHF reclaims 0.9000 as SNB's surprise rate decrease puts Swiss Franc on the back foot

Dupoin UK · 26 Mar 20241K Views

In the European session, the USD/CHF pair has managed to surpass the significant resistance level of 0.9000. This upward movement comes despite a slight retreat in the US Dollar following its recent monthly peak.

The Swiss Franc has seen a rebound despite the US Dollar's moderation, spurred by the surprise decision of the Swiss National Bank (SNB) to cut rates.

The SNB's unexpected announcement last week of a 25 basis points (bps) rate cut, bringing rates to 1.50%, caught many investors off guard, as consensus expectations had leaned towards unchanged rates. This move by the SNB marked the initiation of a rate-cutting cycle, making it the first among developed nations' central banks to do so.

During the London session, S&P 500 futures displayed notable gains, indicating an uptick in market risk appetite.

Additionally, 10-year US Treasury yields fell to 4.25%, driven by firm market expectations of forthcoming interest rate cuts starting from the June policy meeting.

Looking ahead, market focus will be on the release of the US core Personal Consumption Expenditure price index (PCE) for February, scheduled for publication on Friday.

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