USD/CHF surges to two-week high, further beyond mid-0.9700s post-SNB decision – by hareshmenghani USDCHF SNB InterestRate Fed Currencies
USD/CHF catches aggressive bets and jumps to a two-week high following the SNB policy decision.Bets for more aggressive Fed rate hikes continue to lift the USD and remain supportive of the move.reverses an intraday dip to the 0.9620 area and spikes to a two-week high after the Swiss National Bank announced its monetary policy decision. The pair breaks through the 100-day SMA barrier and is currently trading around the 0.9765-0.9770 region.
As was widely expected, the SNB hiked its benchmark sight deposit interest rate by 75 bps to 0.50% from -0.25% previous. This comes on the back of a surprise 50 bps increase in the June meeting, which was the first hike since September 2007. The Swiss franc, however, weakens across the board in the absence of a hawkish surprise. Apart from this, relentless US dollar buying provides a strong lift to the USD/CHF pair.
In fact, the USD Index, which measures the greenback's performance against a basket of currencies, rose to a fresh 20-year peak amid a more hawkish stance adopted by the Federal Reserve. It is worth noting that the Fed raised interest rates by another 75 bps on Wednesday and signalled more aggressive rate increases at its upcoming meetings. Apart from this, technical buying above the 100 DMA barrier remains supportive of the move.
Hence, it remains to be seen if the latest leg up is backed by genuine buying or turns out to be a stop. Investors now look forward to the post-meeting press conference, where comments by Thomas Jordan, Chairman of the Governing Board of the , should provide a fresh impetus to the USD/CHF pair. Later during the early North American session, traders will take cues from the release of the US Weekly Initial Jobless Claims data.
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