USD/CHF hits monthly highs above 0.9310 as the dollar strengthens

• Swiss franc confirms weekly losses across the board.
• USD/CHF could post the highest weekly close since April 2021.

The USD/CHF is rising on Friday for the second day in a row and recently reached at 0.9330, the highest level since late January. The Swiss franc is consolidating weekly closes versus the dollar rand also against the euro.

The war and the Fed

US President Biden said the US aims to end normal trade relations with Russia, among other announcements. In Ukraine, Russian forces increased bombardments. Earlier, comments from Russian President Putin about a shift in conversations with Ukraine were not followed by more details.

In the economic field, the focus turns to the Federal Reserve. The FOMC will have its policy meeting next week, with a rate hike priced in. “With the economy growing strongly, creating jobs in significant numbers and experiencing the fastest rate of price inflation in 40 years, not even the uncertainty and financial market volatility caused by Russia's invasion of Ukraine will deter the Fed from hiking on Wednesday. We continue to look for six 25bp hikes this year and two more in 2023”, commented analysts at ING.

The Swiss National Bank is seen as holding on to negative rates for the moment, particularly after the recent decline in EUR/CHF. The pair is about to end the week sharply higher, recovering from levels under parity, the lowest since 2015.

USD/CHF Highest weekly close in almost a year

The USD/CHF is trading near the recent top. A close around current levels would be positive for the US dollar and the highest in months. The pair needs a clear break of the 0.9330 area to point to more gains. A failure around current levels, would open the doors for a bearish correction. A critical support is seen at 0.9140, an uptrend line.

USD/CHF weekly chart