The Swiss franc continues to rise after the radical reversal from the SNB, while the US dollar falls

Swiss Franc, USD/CHF, US Dollar, JPY, China – topics of conversation

• The Swiss Franc has continued its upward trend after the SNB’s hawkish stance
• `AC shares movei.e higher despite a weak lead from North America
• Fed’s fight against inflation creates USD volatility. Where will USD/CHF end up?

The Swiss franc continued its stunning rally after Swiss National Bank President Thomas Jordan said on Thursday that the bank was ready to react to inflation currently at 2.5%.

USD/CHF barely spent 4 days above parity before collapsing and now revolving around 0.9700. The US dollar lost ground across the board ahead of the New York close and remained steady throughout the Asian session. Treasury yields also fell significantly.

Elsewhere, Japanese headline inflation met expectations of 2.5% yoy, but its preferred core measure came in at 2.1%, slightly above the 2.0% expected for the same period.

In a Bloomberg interview Japan’s former Deputy Minister of Finance Eisuke SAkakibaraknown as Mr. Yen, said that USD/JPY could rise to 150. He cited the growing monetary policy divide between the Bank of Japan (BoJ) and the Fed for the call.

Wall Street continued its slide into the overnight cash session, although futures markets are pointing to a rosier start to the day.

the fed place seems to have expired worthless with Kansas City Fed President Esther George Supporting Chair Powell’s comments earlier in the week. That means interest rates are rising, and tight financial conditions would help bring down inflation.

APAC stocks had a positive day as all major indexes gained over 1% at varying degrees. China cut its 5-year lending rate (LPR) to 4.45% from 4.6% to boost the troubled real estate sector.

With lower US yields and USD, gold staged a decent rally and held up today, trading at $1,840. Crude is a bit softer with WTI and Brent futures contracts spanning US$111.00 barrels.

Aside from the UK retail sales data today, the market will take into account central banker comments flowing over the wires.

The full economic calendar can be viewed here.

USD/CHF Technical Analysis

USD/CHF hit a 2-year high at 1.0049 last week and has since fallen towards 0.9700. This peak can resist when revisited.

The price is currently near a previous low of 0.9709 and is struggling to push down. The 38.2%Fibonacci retracement move from 0.9087 to 1.0049 comes in at 0.9691 and could provide support.

diagram ccreated in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel use the comments section below or @DanMcCathyFX on twitter

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