USD/CHF EYES A BUMPY RIDE BELOW 0.9100 AS FED TO PAUSE RATE HIKES TO DODGE US RECESSION

The USD/CHF pair is displaying topsy-turvy moves in a narrow range around the immediate support of 0.9120 in the Asian session. The Swiss Franc asset is expected to witness sheer selling pressure after surrendering the round-level support of 0.9100. The downside bias for USD/CHF is backed by rising expectations for a pause in the policy-tightening spell by the Federal Reserve (Fed).

Last week, Fed chair Jerome Powell in a private meeting with United States lawmakers anticipated one more rate hike in 2023. An absence of a time period fades the expectations of that rate hike in the May monetary policy tightening.

Also, escalated recession fears after the release of a downbeat US ISM Manufacturing PMI are required to be tamed, which could be done through infusing confidence among investors that the Fed is also focusing on securing the economy from contraction apart from focusing on achieving price stability.

Meanwhile, S&P500 futures are recovering marginal losses reported in the early Asian session as the risk appetite of the market participants is extremely solid. The US Dollar Index (DXY) has attempted a rebound after building a cushion near 102.00, however, the downside looks likely ahead. The demand for US government bonds has also seen some decline. This has led to a decline in the losses in 10-year US Treasury yields, which has pushed them to 3.43%.

On the Swiss Franc front, rising inflationary pressures are creating troubles for the Swiss National Bank (SNB). SNB Vice Chairman Martin Schlegel told Swiss broadcaster SRF in an interview broadcast on Monday that the Swiss National Bank will do everything it can to bring inflation down including hiking interest rates further as well as selling foreign currencies.