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USD/CHF drifts lower to 0.8770 in Tuesday’s early European session, down 0.19% on the day.  The SNB is anticipated to cut its key policy rate by 25 bps on Thursday.  Friday’s US employment data prompted the anticipation of a Fed rate cut next week. The USD/CHF pair softens to around 0.8770 during the early European session on Tuesday. The uptick of the Swiss Franc (CHF) is bolstered by further turmoil in the Middle East, which boosts the safe-haven flows. The release of the US November Consumer Price Index (CPI) data and the Swiss National Bank (SNB) interest rate decision will be the highlights for this week.  Turbulence in the Middle East increased over the weekend as Syrian President Bashar al-Assad and his family fled to Moscow and were granted political asylum, ending 50 years of a brutal dictatorship. The downfall of Bashar al-Assad’s regime could lead to a conflict involving regional countries, lifting the safe-haven currency like the CHF against the Greenback. “The government’s collapse in Syria could see haven demand flowing in,” said ANZ Group Holdings analysts.  The SNB is expected to cut its key policy rate by 25 basis points (bps) at its December meeting on Thursday. According to a Reuters poll, over 85% of economists estimated the Swiss central bank would cut its main rate by 25 bps to 0.75% on Thursday. Christian Schulz, the deputy chief European economist at Citi, expected the SNB to downgrade its short-term forecasts again, adding, “The SNB’s guidance will likely remain dovish”. This, in turn, might undermine the CHF and act as a tailwind for USD/CHF.  On the other hand, traders raised their bets for another US Federal Reserve (Fed) rate cut in the December meeting after the US employment report on Friday. Data released on Friday showed that US job…

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Filed under: News - @ December 10, 2024 6:17 am