Swiss Franc Rebounds on Safe-Haven Demand Amid US Rate Cut Speculation
The Swiss franc has made a modest recovery against the US dollar on Tuesday, climbing back from its weakest level in over a month. This move comes as traders position themselves ahead of the release of US retail sales data, which is expected to have a significant impact on the Federal Reserve's policy path.
Recent economic data has tempered expectations that the Fed will maintain higher interest rates for longer, with futures markets now pricing in a roughly 70% chance of a rate cut by September. This shift in sentiment has led to a pullback in the US dollar, which had rallied on earlier bets of continued rate hikes.
Safe-haven demand continues to support the franc, driven by ongoing geopolitical uncertainties and Switzerland's stable economy. The Swiss National Bank's policy stance remains a key driver, with officials signaling a cautious approach to inflation and exports. Any unexpected weakness in the franc could prompt intervention from the SNB.