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• The Swiss franc strengthened against the USD, reaching its strongest level since January 2015, as lower-than-expected US inflation data suggested a potential end to the US Federal Reserve’s tightening cycle.
• Growing concerns about a global economic recession, driven by persistent inflation and elevated borrowing costs, increased demand for safe haven currencies, including the Swiss franc.
• In June, the Swiss National Bank raised its key rate by 25 basis points to 1.75% and hinted at the possibility of another rate increase in September. Policymakers acknowledged the risks of second-round effects on inflation, despite the current slowdown in headline and core figures.
• The Swiss National Bank reaffirmed its readiness to intervene in the foreign exchange market, if necessary, to support the franc.

Long-term buyers of the dollar are still awaiting data and patterns to determine their longer-term positions, with potential absorption expected around the current lows of the USD/CHF currency pair. However, the market currently favors the Swiss franc, with the dollar trading imbalanced to the downside and below the developing value area of the past decade.

When examining the macro chart, we can observe a balanced rate range, and the rate may find new dollar-long buyers around the lower extreme as it approaches at a faster pace.

The possibility of a potential recession could attract buyers to the dollar, aligning with the prevailing macro developments and patterns.

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