USD/CHF price analysis: dollar crashes below 0.8500
USD/CHF has hit multi-year lows below 0.8500 amid dollar weakness. Dovish Fed comments, poor US employment data, and potential rate cuts are key factors.
Key Points
- USD/CHF started 2024 under 0.8500 and recently approached multi-year lows around 0.8400
- July FOMC minutes released on August 21, 2024, revealed discussions of potential rate cuts, weakening the USD
- Poor US employment data has led traders to bet on multiple interest rate cuts from the Fed
- There is potential for USD/CHF to challenge historic lows below 0.8400 - low since 2015 - or bounce back toward 1.0000 - last seen in 2022
USD/CHF Hits Lowest Prices of 2024
The USD/CHF pair has been struggling in 2024, starting the year under the 0.8500 mark and failing to close below that level until recently. Dollar weakness has pushed USD/CHF close to multi-year lows around 0.8400. This decline reflects a broader trend of a weakening dollar, impacting its value against various currencies. Traders are closely monitoring these levels, as it marks significant support that could shape future trading strategies.
FOMC Minutes Sends US Dollar Reeling
Dovish comments from the Federal Reserve at the July FOMC meeting led to bearish price action for the USD. The minutes released on August 21, 2024, indicated that several Fed members had considered a rate cut in July, sparking significant market reactions. This dovish stance suggests caution in the US economic outlook, influencing traders to reassess their positions in the forex market. As a result, the US dollar has faced increased selling pressure.
Why is US Dollar Crashing?
The US dollar's recent crash can be attributed to poor employment data, leading traders to anticipate multiple interest rate cuts from the Fed in the coming months. This expectation reduces demand for the USD as part of the carry trade, where traders seek to profit from interest rate differentials between regions. The combination of weak economic indicators and potential monetary easing has made the dollar less attractive, further driving its decline.
Where Next for USD/CHF?
USD/CHF recently traded below 0.8400, marking the lowest prices since Switzerland de-pegged its currency in 2015. As the pair skims these historic lows, traders are debating whether it will challenge these levels further or bounce back to the 1.0000 mark, last seen in 2022. This critical juncture could define the pair's future path; it remains a focal point for forex traders assessing potential market movements.
How to trade USD/CHF
- Open an account to get started, or practice on a demo account
- Choose your forex trading platform
- Open, monitor, and close positions on USD/CHF
Trading forex requires an account with a forex provider like tastyfx. Many traders also watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.
You can help develop your forex trading strategies using resources like tastyfx’s YouTube channel. Our curated playlists can help you stay up to date on current markets and understand key terms. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.
Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.