The post USD/CHF resumes its decline as dovish bets on the Fed and lower US yields weigh in appeared on BitcoinEthereumNews.com.

The USD/CHF declined towards the 0.8400 level with a 0.40% loss. Markets currently anticipate a significant 160 basis points of easing by the Fed in 2024. The pair ends the year with a 9% depreciation and marks its third consecutive weekly loss. In Friday’s trading session, the USD/CHF pair endured losses as it declined to 0.8405. The pair resumed its weakening trend, pressured by dovish bets on the Federal Reserve (Fed) and the impact of lower US yields, which that weighed heavily on the pair’s dynamics. At their last 2023 meeting, the Federal Reserve recognized a deceleration in inflation and a cooling of the economic activity, endorsing the absence of interest rate increases in 2024 whilst forecasting a 75 bps reduction as per the median terminal rate of the Dot Plot from the Summary of Economic Proyections (SEP). Now, market expectations account for rate cuts in both March and May, and some traders are placing bets on a cut a soon as in the upcoming meeting in January. The market’s being overconfident that the Fed will start the easing cycle sooner than expected is weakening the US dollar. The US Treasury yields are mixed, with some rates up and others down while remaining near multi-month lows. The 2-year rate is positioned at 4.27%, while the 5-year and 10-year rates are registered at 3.84% and 3.87% respectively. As yields descend, reflecting the mentioned dovish expectations, it results in a concurrent disadvantage for the USD, pushing down the USD/CHF. In the upcoming week, markets await US labor market figures. Key insights will encompass December’s Nonfarm Payrolls, Wage Inflation, and Unemployment Rate all closely monitored by the Fed. USD/CHF levels to watch Reflecting on the technical indicators from the daily chart, it’s evident the selling pressure is currently in command. The pair is…

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Filed under: News - @ December 30, 2023 11:24 am