USD/CHF nosedives to a new 8-year low beneath 0.8700 on weak US CPI – by christianborjon USDCHF Currencies Majors
US Federal Reserve might refrain from increasing rates twice toward the end of the year. Consequently, the USD/CHF dropped to an 8-year low at 0.8659. At the time of writing, the USD/CHF pair exchanges hands at 0.8682, down more than 1%.The US Bureau of Labor Statistics revealed that inflation in June in the US decelerated sharply, hitting 3.0% YoY, below estimates of 3.1%, as shown by the Consumer. Core CPI, which excludes the price of volatile items like food and energy, downtick 0.5%, from 5.
In the meantime, the CME FedWatch Tool shows that the odds for a 25 basis points rate increase in the July meeting are at 92.4%, while the chances for additional interest rate increases diminished below 30%. Hence, the USD/CHF pair extended its losses, as the major has fallen more than 100 pips of 1.30% in the day after hitting a daily high of 0.8794. Failure to crack the 0.8800 figure, alongside weaker data in the US, opened the door to extending the USD/CHF’s downtrend.
Federal Reserve had crossed the wires earlier in the New York session, led by Richmond Fed President Thomas Barking, saying. that inflation is too high and emphasizing he’s comfortable doing more to tackle inflation. Recently, the Minnesota Fed President Neil Kashkari noted that the fight against inflation must be won and that if it gets higher, hikes must be raised.
The US Dollar Index , a gauge of the buck’s value against a basket of peers, remained downward pressured, exchanging hands near two-year lows. The DXY sits at 100.597, losses 1.04%, undermined by US Treasury bond yields plunge.perspective, the USD/CHF remains downward biased, extending its losses past the 2021 yearly low of 0.8757, which exacerbated a drop below the 0.8700 figure. Should be said, the Relative Strength Index has turned oversold, though still showing signs the downtrend is solid.
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