empty
06.05.2022 08:44 AM
Can USD/CHF reach parity?

This image is no longer relevant

The US dollar quickly recovered from its slump after the meeting of the Federal Reserve. Yesterday, USD surged upwards against all major currencies, including CHF.

USD/CHF gained 1.32% on Thursday, recouping losses sustained on Wednesday after the Fed meeting.

Earlier, the US central bank hiked interest rates by 50 basis points for the first time since 2000 to quell record-high inflation.

However, the US dollar failed to take advantage of the regulator's increasingly hawkish course, as Fed chairman Jerome Powell stated that a 75 basis point hike was off the table at the following Fed meetings.

Powell's statements sent the US dollar downwards from its earlier peaks. USD/CHF fell below 0.9730.

On Thursday, USD rallied strongly and reached a 19-year high, with the US dollar index jumping to 103.94.

US stock indexes slid down yesterday in response to aggressive Fed monetary tightening, giving support to the US dollar.

Investors are anxious that if the Fed raises interest rates too quickly, it could weigh down on US economic growth.

Furthermore, the ongoing COVID-19 outbreak in China could lead to a global economic slowdown. Beijing's "zero-COVID" policy threatens to jeopardize global economic recovery.

As a result, demand for the US dollar as a safe-haven asset increases amid risk aversion in the market. The Swiss frank, another currency considered to be a save haven asset, lost ground to the US dollar as well.

Over the past several trading sessions, USD/CHF has hit new yearly highs, indicating that the pair could reach parity amid the steady uptrend.

The pair continues to surge upwards, despite the Relative Strength Index being at 79.01, signaling that USD/CHF is overbought and is about to peak.

Yesterday, the quote traded near 0.9890, trying to regain weekly highs. The Swiss currency reversed downwards after the release of Swiss CPI data for April.

This image is no longer relevant

Year-over-year, inflation in Switzerland rose to 2.5%, up from 2.4% in March and largely matching expectations.

Lower inflation does not make the hawkish tone of the Swiss National Bank's chairman, Tomas Jordan, look convincing in the future.

The US dollar could also find support in the divergence between US and Swiss monetary policies.

The nearest serious resistance for USD/CHF on the way to the parity level of 1.000 is located at 0.9901, analysts say. The pair last tested 0.9901 on March 23.

Аlena Ivannitskaya,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

US Market News Digest for May 1

The US stock market weathered notable volatility in April, but a successful rally helped major indices recoup losses. Despite data showing a 0.3% contraction in US GDP for the first

Ekaterina Kiseleva 11:54 2025-05-01 UTC+2

Feast in the Storm: S&P 500 Celebrates Gains as Dollar Drowns and China Weakens

S&P 500 Posts Sixth Straight Day of Gains Oil Falls More Than 1% China Manufacturing Activity Plummets as Trump Tariffs Continue to Squeeze Dollar Set for Worst Month

Thomas Frank 12:09 2025-04-30 UTC+2

US Market News Digest for April 30

US stock indices remain on a positive trajectory, but market pressure has intensified due to a sharp drop in Super Micro shares and the upcoming earnings reports from tech heavyweights

Ekaterina Kiseleva 11:13 2025-04-30 UTC+2

Stock markets regaining optimism. Where to find new entry points

European stocks rose amid hopes of easing trade tensions between the US and China. WTI oil fell by 1.54% to $62.05, while Brent declined by 1.51% to $65.86

12:42 2025-04-29 UTC+2

US Market News Digest for April 29

The S&P 500 and Nasdaq continue to climb, maintaining their upward momentum despite mixed performances across other sectors. Softer rhetoric from the Trump administration and expectations of further tariff relief

Ekaterina Kiseleva 11:59 2025-04-29 UTC+2

Optimism returns to the markets: where to look for new growth points

European stocks rose amid hopes for a reduction in trade tensions between the US and China. WTI oil fell by 1.54% to $62.05, Brent by 1.51% to $65.86

Thomas Frank 10:42 2025-04-29 UTC+2

US Market News Digest for April 28

The S&P 500 and Nasdaq ended the previous trading session higher, defying choppy performance across Asian and European exchanges. Investors are now focused on the upcoming economic data and earnings

Ekaterina Kiseleva 11:31 2025-04-28 UTC+2

Trump's first 100 days behind us: Markets await tariffs, earnings from giants

Trump policy summaries European stocks rose on Monday after a second straight weekly gain Investors are eyeing tariff changes, as well as a busy week of earnings and economic data

Thomas Frank 11:22 2025-04-28 UTC+2

Wall Street surges: Nasdaq soars 2.74% as tech stocks drive market higher

Procter & Gamble and PepsiCo fell after cutting forecasts, while Hasbro and ServiceNow jumped following their earnings reports. March durable goods orders surged more than expected. Alphabet beat revenue expectations

12:52 2025-04-25 UTC+2

US Market News Digest for April 25

US stock indices closed higher for the third straight session, buoyed by a sharp rally in the technology sector. The Nasdaq surged 2.74%, driven by strong earnings reports from companies

Ekaterina Kiseleva 11:42 2025-04-25 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.