USD/CHF MOVES ABOVE 0.8950 DUE TO EXPECTATIONS OF DELAYING FED RATE CUTS
- USD/CHF appreciates as the Fed may delay rate cuts to bring inflation under control.
- CME FedWatch Tool indicates a decrease to 67.7% odds of a Fed rate cut in September, down from 68.5% the previous day.
- The Swiss Franc may limit its downside as political and geopolitical uncertainty has driven safe-haven flows.
USD/CHF continues to gain ground for the second consecutive day, trading around 0.8960 during the early European session on Wednesday. This upside could be attributed to the higher US Dollar (USD) due to heightened expectations of delaying interest rate cuts by the Federal Reserve (Fed). According to the CME FedWatch Tool, investors are pricing in 67.7% odds of a Fed rate cut in September, compared to 68.5% a day earlier.
Reuters cited Fed Governor Michelle Bowman repeating her view on Tuesday that holding the policy rate steady for some time will likely be enough to bring inflation under control. Meanwhile, Fed Governor Lisa Cook said it would be appropriate to cut interest rates "at some point" given significant progress on inflation and a gradual cooling of the labor market, though she remained vague about the timing of the easing
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