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The USD/CHF pair drifts higher to around 0.8730 during the early European session on Friday. The renewed Greenback demand provides some support to the pair. Traders brace for the advanced US Michigan Consumer Sentiment data for November and the speech from the Federal Reserve’s (Fed) Michelle Bowman later on Friday.
The US Fed on Thursday decided to cut its borrowing costs by 0.25 basis points (bps), half the size of its September reduction, bringing down the federal funds rate to a range of 4.5% to 4.75% from its current 4.75% to 5% level. Fed Chair Jerome Powell said during the press conference that the “economy is strong overall and has made significant progress toward our goals over the past two years.”
Fed’s Powell emphasized that the Fed doesn’t want to move too quickly on the interest rate nor move too slowly and do unnecessary damage to the labor market. The Fed will continue assessing data to determine the “pace and destination” of interest rates. Meanwhile, the US Dollar (USD) attracts some buyers as investors expect Trump’s policies would spur economic growth and inflation and reduce the pace of interest rate cuts.
On the other hand, the uncertainty surrounding global economic growth and the ongoing geopolitical tensions in the Middle East could boost the safe-haven flows, benefiting the Swiss Franc (CHF). President-elect Donald Trump’s comeback victory on Tuesday undermines diplomatic attempts to stop Israel’s multifront conflicts in the near term and calls into question US long-term support for Israel’s military campaigns against Iran and its proxies.More By This Author:USD/CAD Holds Steady Above 1.3850 As Fed Cuts Its Rates, Eyes On Canadian Employment Report USD/CHF Drifts Lower To Near 0.8750, Fed Rate Decision Looms USD/CAD Extends Upside To Near 1.3950, Fed Rate Decision In Focus
