USD/CHF advances to near 0.9060 on risk aversion, subdued Swiss Leading Indicator

• USD/CHF gains ground on risk-off sentiment ahead of US data.
• US GDP Annualized is expected to remain consistent at 3.2% in the fourth quarter of 2023.
• KOF Swiss Leading Indicator declined to 101.5 in March from a revised 102.0 in February.

USD/CHF moves higher to near 0.9060 during the early European session on Thursday. The US Dollar (USD) receives upward support against the Swiss Franc (CHF), which could be attributed to the risk aversion ahead of the key economic figures from the United States (US).

Traders adopt a cautious stance ahead of the releases of Gross Domestic Product Annualized and Initial Jobless Claims data scheduled to be released on Thursday. Furthermore, Personal Consumption Expenditures is set to be revealed on Friday.

US Dollar Index (DXY) rises to near 104.50, with higher 2-year and 10-year yields on US coupon bonds standing at 4.61% and 4.20%, respectively, by the press time. However, conflicting views among members of the Federal Open Market Committee (FOMC) regarding monetary policy easing are adding to market uncertainty.

Federal Reserve Board Governor Christopher Waller continues to advocate for a cautious approach toward rate cuts, citing persistent inflation data. Atlanta Fed President Raphael Bostic shares this sentiment, foreseeing only one rate cut this year and warning against premature reductions that could worsen economic disruptions.

In other news, the ZEW Survey – Expectations rose by 1.3 points in March to reach 11.5, the highest level since October 2021. This increase was supported by the Swiss National Bank's decision to lower its interest rate by 25 basis points to 1.5%. Following the announcement, the Swiss Franc (CHF) weakened further year-to-date, as the SNB's move is likely to undermine the currency, being the first G10 central bank to implement such a cut.

According to the KOF Swiss Economic Institute, Switzerland's leading KOF economic barometer declined to 101.5 points in March from a revised 102.0 points in February. This indicator provides insight into the anticipated performance of the Swiss economy approximately six months ahead.