USD/CHF offers its gains from the previous session, trading around 0.8650 during the early European hours on Tuesday. This downside of the pair could be limited as the (USD) gained support following a surge in US Treasury yields, which climbed over 2% on Monday. At the time of writing, the 2-year and 10-year US Treasury bond yields stand at 4.04% and 4.20%, respectively.Recent dispelled the likelihood of a bumper rate cut by the Federal Reserve (Fed) in November. According to the CME FedWatch Tool, the likelihood of a 25-basis-point rate cut in November is 89.1%, with no expectation of a larger 50-basis-point cut.On Monday, of Minneapolis President Neel Kashkari highlighted that the Fed is closely monitoring the US labor market for signs of rapid destabilization. Kashkari cautioned investors to anticipate a gradual pace of rate cuts over the coming quarters, suggesting that any monetary easing will likely be moderate rather than aggressive.The Swiss Franc (CHF) faces pressure as a continued slowdown in Swiss inflation strengthens expectations of another rate cut by the Swiss National Bank (SNB) at its upcoming December meeting. In September, the SNB reduced its key rate for the third time in a row by 0.25%, bringing it to 1%. Inflation also fell for the third consecutive month, reaching 0.8% in September—its lowest level in over three years—down from 1.1% in August.However, the CHF could find support from safe-haven demand amid uncertainty surrounding the US election and rising geopolitical tensions in the Middle East. Israel’s strikes on Hezbollah-linked financial sites in Beirut have heightened fears of an escalating conflict.In the US presidential race, Democratic candidate Kamala Harris and Republican Donald Trump delivered contrasting messages as they worked to sway undecided voters in the final two weeks leading up to Election Day.More By This Author:Australian Dollar Depreciates As US Dollar Remains Solid Following A Surge In US Yields EUR/GBP Remains Below 0.8350 Following Germany PPI Data EUR/JPY Holds Ground Around 162.50, Downside Risks Emerge After Verbal Interventions
USD/CHF Depreciates To Near 0.8650, Downside Risk Seems Restrained Due To Higher US Yields
