The USD/CHF pair trades near 0.8980, supported by a hawkish Fed and positive US economic indicators. While the Fed cut rates as expected, it signaled a less aggressive easing stance next year. Stronger US GDP and jobless claims data also contributed to the USD's strength.
USD/CHF trades with mild gains near 0.8980 in Friday’s early European session. The Fed ’s hawkish approach and encouraging US economic data support the USD. The safe-haven flows might boost the CHF and cap the upside for the pair. The USD/CHF pair holds positive ground around 0.8980 during the early European session on Friday. A hawkish rate cut from the US Fed eral Reserve ( Fed ) and stronger US economic data boost the Greenback against the Swiss Franc (CHF).
The attention will shift to the release of the US Personal Consumption Expenditures (PCE) Price Index for November, which is due later on Friday. The US central bank cut the interest rate by 25 basis points (bps) as widely expected. Nonetheless, the Fed signaled a more hawkish stance on its easing cycle next year. The Fed's dot plot, a chart that projects the future path of interest rates, indicated a half-percentage point rate cut in 2025, compared with a full percentage cut projected in September.According to the Summary of Economic Projections (SEP), or “dot plot”,the Fed intends to reduce the number of interest rate cuts next year from four to just two quarter-percent cuts. The upbeat US economic data released on Thursday has contributed to the USD’s upside. The third estimate reading released by the Bureau of Economic Analysis showed that the US Gross Domestic Product (GDP) grew at a 3.1% annualized rate in the third quarter (GDP), compared to a previous projection of 2.8%. Additionally, the US weekly Initial Jobless Claims declined to 220Kin the week ending December 14, compared tothe previous week's print of 242K, and came in below the market consensus of 230,000. On the Swiss front, the Swiss National Bank (SNB) is expected to deliver a further interest rate cut in March 2025 to 0.25% following last week’s 50 bps reduction in the key interest rate. The SNB softened its forward guidance for possible further cut
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