USD/CHF rebounds ahead of Powell’s speech

The USD/CHF pair has attracted more demand after a marginal correction closer to the 0.9200 mark amid positive risk appetite that is obviously cautious and keeping an eye on the performance of rising US Treasury yields.

Fed Bostic, on Monday, said that no recession in CY2023 but has trimmed his GDP forecast dramatically to 1%. The USD/CHF pair has sensed buying interest after dropping to near the round-level support of 0.9200 in the early Asian session. Earlier, the Swiss franc asset extended its recovery above the immediate resistance of 0.9200 despite a cheerful market sentiment.

S&P500 futures are displaying a subdued performance after a corrective move on Monday as equities failed to extend a rally. Stretched upside in stocks triggered long liquidation. The Dollar Index refreshed its seven-month low at around 102.50 led by soaring recession fears after the economic activities’ contraction amid less-hawkish monetary policy expectations mainly caused by wage inflation decline.

The demand for US government bonds is losing traction further as investors’ risk appetite is declining again. This has led to an increase in 10-year US Treasury yields above 3.53%.

On Tuesday, the remarkable event will be the speech by Fed chair Jerome Powell, which will shatter ambiguity over February’s monetary policy decision. Raphael Bostic’s remarks were full of information that will guide investors for further action.

On the Swiss front, a decline in the Real Retail Sales data, for November, on an annual basis is going to compel the Swiss National Bank to keep monetary policy moderate. The economic data contracted by 1.3% while the street was expecting an expansion of 3.0%.