The USD/CHF currency pair appreciated as the US Dollar strengthened following the Federal Reserve's (Fed) hawkish shift in its policy outlook. Swiss real retail sales rose by 0.8% year-over-year in November, missing expectations of 1.2%. The Fed's Summary of Economic Projections indicated expectations for only two rate cuts in 2025, supporting the US Dollar. Meanwhile, the Swiss Franc (CHF) received support from escalating geopolitical tensions in the Middle East and the Russia-Ukraine conflict.
USD/CHF appreciatedas the US Dollar strengthenedon the Fed’s hawkish shift regarding its policy outlook. SwissReal Retail Sales increased by 0.8% YoY in November, against the expected 1.2% and prior 1.5%. rise. The recent dot plot in the Fed’s Summary of Economic Projections indicated expectations for just two rate cuts in 2025. USD/CHF steadies after registering lossesin the previous session, trading around 0.9100 during the Asian hours on Monday.
On Friday, the US manufacturing sector continued to contract in December, though at a slower pace, as the ISM Manufacturing PMI improved to 49.3 from 48.4 in November. This figure exceeded the market expectation of 48.4. The US Dollar may further strengthen as the Federal Reserve is expected to halt its easing cycle at the January meeting following three consecutive rate cuts.
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