Yen Intervention Shakes USD/CHF
The USD/CHF pair traded around 0.8088 on Friday (July 31), up from the previous close of 0.8056. The currency pair briefly hit a daily high near 0.8129 before paring some of its gains.
The US dollar received a boost from rising US government bond yields. However, its gains remained limited after Japan's intervention to support the yen rattled the foreign exchange market and heightened vigilance regarding potential follow-up actions.
The US Dollar Index (DXY) hovered around 99.96, up approximately 0.24% this evening. Despite the renewed strength, the index remains near the psychological 100.00 level, suggesting that the dollar's recovery momentum is not yet fully robust.
Market attention is also focused on Federal Reserve policy. While the Fed has maintained interest rates, several central bank officials have publicly advocated for rate hikes to curb inflation. Markets now estimate a roughly 69% probability of a rate hike in September.
From Switzerland, market participants are awaiting July inflation data, which will provide clues regarding the Swiss National Bank's policy direction. Persistently low inflation could reinforce expectations that the central bank will keep interest rates at 0%, potentially limiting the Swiss franc's appreciation.
Newsmaker Analysis: USD/CHF retains the potential to strengthen as long as it holds above the 0.8050 area. However, a failure to break back into the 0.8120–0.8130 zone indicates that buying pressure is not yet solid. A drop below 0.8050 could push the pair toward 0.8000, while a break above 0.8130 could open the door for further gains.
Source: Newsmaker.id
