The US Dollar surged over 0.40 percent against the Swiss Franc on Friday, breaking above the 0.8150 level to trade at 0.8165 after rebounding from session lows of 0.8124. The sharp move follows fresh US consumer inflation data released Friday, which combined with Thursday’s hotter-than-expected producer price index has dramatically shifted Federal Reserve expectations. Traders are now aggressively pricing in an interest rate hike at next week’s FOMC meeting, reversing dovish sentiment that had dominated earlier in the week.
The inflation double-punch has caught markets off guard, forcing rapid repositioning across USD pairs. The Swiss Franc, typically a safe-haven asset, weakened as dollar strength overwhelmed defensive flows. Currency traders and forex brokers should prepare for elevated volatility heading into the Fed decision, with USD/CHF technicals now favoring further upside if the bullish momentum holds above 0.8150 support.
FXnCO Insight
Position for continued dollar strength through next week’s Fed meeting, but keep tight stops as any dovish surprise could trigger sharp reversals in USD crosses.
Source: FXStreet