Market Analysis

During the early European session on Friday, the USD/CHF pair continued its downward trend for the third consecutive day, reaching 0.9095 after pulling back from its recent peak of around 0.9224, which marked a seven-month high. 

This decline is attributed to a weakened US Dollar (USD) across the board. Investors are eagerly awaiting the release of the US Nonfarm Payrolls (NFP) report for April, expected to indicate an addition of 243K jobs to the US economy.

Following the Federal Reserve's decision to maintain its current monetary policy earlier in the week, Fed Chair Powell mentioned during the press conference that recent progress on inflation has slowed, necessitating more time to build confidence in its trajectory towards the 2% target. 

The prevailing narrative of higher US interest rates for a prolonged period is anticipated to bolster the Greenback and limit downside pressure on the USD/CHF pair in the short term. Additionally, the Fed announced a reduction in the pace of its balance sheet reduction (QT).

Switzerland saw a faster-than-expected acceleration in annual inflation for April, according to the Federal Statistics Office's report on Thursday. The Swiss Consumer Price Index (CPI) rose to 1.4% year-on-year in April, up from 1.0% in March, surpassing market expectations of 1.1%. This uptick in inflation propelled the Swiss Franc (CHF) and acted as a counterforce against the USD/CHF pair. 

Last week, Swiss National Bank (SNB) Chairman Thomas Jordan affirmed that the central bank has effectively managed inflation, with projections indicating price increases will remain within the target range for the coming years.

USD/CHF

Paraphrasing text from "FX Street" all rights reserved by the original author.