USD/CHF rose near 0.8650 as expectations of a March Fed rate cut waned.

• USD/CHF continues to receive market attention on the Fed’s interest rate cuts.
• SNB Chairman Thomas Jordan is scheduled to speak at the WEF in Davos on Thursday.
• Solid retail sales data helped weaken the Federal Reserve’s monetary policy easing.

USD/CHF rose for the third straight day despite a correction in the US Dollar (USD). The USD/CHF pair traded higher near 0.8650 during Thursday’s Asian session. The Swiss franc (CHF) came under downward pressure ahead of Swiss National Bank (SNB) Chairman Thomas Jordan’s speech at the World Economic Forum (WEF) in Davos on Thursday.

The Swiss National Bank’s (SNB) most recent policy update was in December, expressing its commitment to adjust monetary policy where necessary to keep inflation within a range consistent with price stability over the medium term. In recent policy decisions, the SNB has maintained a relatively neutral stance without any major surprises.

Recent indicators, including a slight rise in Swiss consumer prices in December and improving Swiss consumer demand in November, may influence the SNB’s decision-making at its upcoming meeting. These moderate numbers could potentially discourage the Swiss National Bank from adjusting its monetary policy. The SNB has also signaled its willingness to be active in foreign exchange markets to provide support for the Swiss franc if needed.

The US dollar is receiving support from investor sentiment as expectations of an initial interest rate cut by the Federal Reserve (Fed) in March have eased. This adjustment was further strengthened by strong U.S. retail sales data released on Wednesday. The probability of a rate reduction was noticeably lowered to 57%, compared to the previous 70% or higher.

US retail sales data for December showed a 0.6% increase from the previous month, beating market expectations of 0.4% and the previous figure of 0.3%. Additionally, the Retail Sales Control Group showed improvement to 0.8% compared to the previous figure of 0.5%. Market participants will likely be keeping an eye on US housing data due to be released on Thursday.