Photo by Claudio Schwarz on Unsplash
USD/CHF trades around 0.8660 during the early European session on Thursday, hovering around the two-month high of 0.8686, which was recorded on Wednesday. The USD/CHF pair could appreciate further as the Swiss Franc (CHF) faces challenges due to heightened expectations of another interest rate cut by the Swiss National Bank (SNB) at its upcoming December meeting.The Swiss Franc may receive some support from safe-haven flows amid rising concerns over the Middle East conflict. On Wednesday, Israeli strikes hit southern Beirut, while US Secretary of State Antony Blinken toured the region, advocating for a ceasefire in both Gaza and Lebanon.Moreover, Iran-backed Hezbollah intensified its attacks on Israel, deploying “precision missiles” for the first time and launching new types of drones targeting Israeli sites. Hezbollah also claimed to have struck an Israeli military factory near Tel Aviv, per Reuters.The US Dollar weakened slightly, driven by a modest dip in US Treasury yields. However, the downside risk for the Greenback would be limited as rising inflation concerns have lessened the chances of a significant rate cut by the Federal Reserve in November. According to the CME FedWatch Tool, there is an 88.9% probability of a 25-basis-point rate cut, with no expectation of a larger 50-basis-point cut.Traders are likely to keep an eye on the S&P Global Purchasing Managers Index (PMI), a leading indicator gauging US private-business activity in the manufacturing and services sector, which is set to be released on Thursday.More By This Author:Australian Dollar Gains Ground Following Domestic PMI Release EUR/GBP Depreciates Toward 0.8300 Due To Rising Likelihood Of Another Rate Cut By The ECBAUD/JPY Moves Above 101.50 Due To Growing Doubts Over BoJ Policy Outlook
