The USD/CHF currency pair advanced on Tuesday, trading around 0.8103, up approximately 0.24% for the day, as the US Dollar regained most of its previous losses. This move was supported by hawkish expectations for the Federal Reserve, following Chair Kevin Warsh’s firm comments on inflation at the Jackson Hole Symposium. Warsh emphasized that the Fed would need to take further action if it was not confident that inflation was returning to the 2% target. As a result, the CME FedWatch Tool indicated that traders now assign about a 65% probability to a rate hike at the Fed’s September 15-16 meeting [1].
In contrast, Switzerland’s inflation remains subdued, with the Consumer Price Index (CPI) near the lower end of the Swiss National Bank’s (SNB) 0%-2% price-stability range. This has reinforced expectations that the SNB will keep its policy rate unchanged at 0% in upcoming meetings. The August CPI data for Switzerland, due on Wednesday, is expected to show no change on a monthly basis after a 0.1% decline in July, while the annual rate is forecast to rise slightly to 0.5% from 0.4% [1].
From a technical perspective, USD/CHF is holding above key moving averages, with the 50-day Simple Moving Average (SMA) at 0.8091 providing immediate support. The 100-day and 200-day SMAs at 0.7987 and 0.7934, respectively, reinforce a positive outlook. The Relative Strength Index (RSI) near 54 suggests moderate upside momentum, and the MACD has turned slightly positive, indicating that buying pressure is gradually rebuilding. Resistance is seen at 0.8150 and 0.8200, while a close below 0.8091 could expose the pair to further downside towards 0.7987 and 0.7934 [1].
The US Dollar was broadly stronger against major currencies, with the largest gain against the New Zealand Dollar. Against the Swiss Franc, the USD was up 0.24% on the day [1].
CONCLUSION
The USD/CHF pair’s recovery is driven by renewed Fed rate hike expectations and subdued Swiss inflation, supporting a bullish technical outlook. Market participants are closely watching upcoming US and Swiss central bank decisions and inflation data for further direction. The overall sentiment remains moderately positive for the US Dollar in the near term.