USD/CHF rebound approaches 0.9300 as banking fears recede, SNB vs. Fed play in focus – by anilpanchal7 USDCHF RiskAversion SNB Fed Banks
The Swiss Franc pair’s latest rebound could be linked to the US Dollar’s corrective bounce off the five-month low amid hawkishbets. However, cautious optimism surrounding the latest banking industry updates, following a debacle in the US and Europe.
US Dollar Index bounces off the lowest levels since early February, marked the previous day, while snapping a three-day downtrend, mildly bid around 103.40 by the press time. In doing so, the greenback’s gauge versus the six major currencies traces the late Monday’s recovery in the US Treasury bond yields, as well as the hawkish Fed bets, to tease buyers ahead of the key Federal Open Market Committee Monetary Policy Meeting, up for release on Wednesday.
That said, the Treasury bond yields remain inactive but keep the previous day’s bounce off multi-day low as the US 10-year and two-year Treasury bond yields recovered from the lowest levels since September 2022 on Monday. Furthermore, CME’s FedWatch tool mentions the probability of witnessing a 0.25% Fed rate hike on Wednesday as near 75%, up from the last week’s 65%.
Alternatively, a headline from Bloomberg suggests relief for the traders amid the impending banking crisis, which in turn challenges the US Dollar’s haven demand and may test the USD/CHF upside. “US officials are studying ways they might temporarily expand Federal Deposit Insurance Corporation coverage to all deposits, a move sought by a coalition of banks arguing that it’s needed to head off a potential financial crisis,” reported Bloomberg.
It should be noted that the fears of the FDIC’s inability to cover the US bank deposits, due to the limitations of funds in the reserve, join the doubts surrounding the UBS-Credit Suisse deal to probe the risk-on mood amid a sluggish Asian session.Looking ahead, February month trade numbers from Switzerland will precede the US second-tier housing data to entertain intraday USD/CHF traders.
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