As Russia-Ukraine tensions rise, some buyers are drawn to the USD/CHF above 0.8800

The USD/CHF pair recovers some ground to approximately 0.8835 during early European trading on Wednesday, breaking its three-day losing streak. Expectations of a less aggressive easing of monetary policy by the Federal Reserve (Fed) offer some support to the pair. Later in the day, remarks are expected from Fed officials Lisa Cook and Michelle Bowman.

Broad strength in the USD has been supported by hawkish comments from Fed Chair Jerome Powell, who stated that he was not in a rush to reduce interest rates. This led to a drop in the probability of a December rate cut to below 60%, compared to 82% earlier in the week. Additionally, Kansas City Fed President Jeffrey Schmid highlighted uncertainty around the extent to which rates may be lowered, suggesting that the Fed’s recent cuts signal confidence that inflation is on track to meet its 2% goal.

On the Swiss side, heightened tensions between Russia, Ukraine, and Western allies may fuel demand for the safe-haven Swiss Franc (CHF). On Tuesday, Russia’s Defense Ministry reported that Ukraine launched six ballistic missiles at a facility in Bryansk, using ATACMS missiles in the attack.

Paraphrasing text from "FX Street" all rights reserved by the original author.