USD/CHF pares intraday losses around 0.9750 on SNB, Fed chatters

• USD/CHF picks up bids to consolidate intraday losses, struggles to extend Friday’s downside move.
• Market sentiment remains positive but US dollar bounce off daily lows as traders recheck hawkish Fed bets.
• SNB, Fed expected to ease on rate hikes amid recession fears.

USD/CHF bears struggle to keep reins as traders doubt the next moves of the Swiss National Bank (SNB) and the US Federal Reserve (Fed) heading into Monday’s European session. That said, the Swiss currency (CHF) pair picks up bids to 0.9760 as it trims daily loss to 0.05% intraday, after dropping the most in a month the previous day.

Although Friday’s mostly downbeat US data and cautious Fedspeak triggered the US dollar’s weakness, the greenback appears to regain upside momentum as traders recheck dovish Fed bets. On the other hand, talks that the SNB will go for a 0.50% rate hike in September, after the latest 1.0% increase in benchmark rates, also appeared to have favored the USD/CHF bulls.

US Dollar Index (DXY) remains down for the second consecutive day while keeping Friday’s pullback from nearly a two-decade high, recently picking up bids to 107.95. In doing so, the greenback’s gauge versus the six major currencies justifies recently easing hawkish bias over the Fed’s next moves, especially after the previous day’s mixed US data and cautious Fedspeak. Additionally, weighing on the DXY is the Fed policymakers’ silence period ahead of late July’s Federal Open Market Committee (FOMC).

It’s worth noting that Reuters quoted a Swiss newspaper published on Saturday to mention that the SNB is currently planning to raise interest rates by 50 or 75 basis points in its next scheduled monetary policy announcement in September. The news also stated, “Newspaper Schweiz am Wochenende said the central bank was planning a rate hike of 50 basis points to 0.25% from -0.25% at its next scheduled monetary policy announcement on Sept. 22, though the situation could yet change between now and then. It cited one or more unidentified people involved in the matter.”

Amid these plays, stock futures and Asian equities track Wall Street’s gains but the US Treasury yields remain pressured of late.

Moving on, Tuesday’s Swiss trade numbers may entertain USD/CHF traders ahead of Friday’s US flash PMIs for July. However, major attention will be given to the central bank chatters and an absence of Fedspeak, due to the pre-Fed blackout could keep the pair sellers hopeful.

Technical analysis

50-DMA defends USD/CHF bulls around 0.9735 but the USD/CHF recovery remains elusive unless crossing the 0.9875 hurdle on a daily closing basis.