USD/CHF languishes near its lowest level since September 2011, below mid-0.8000s

• USD/CHF drops to a fresh multi-year trough as the USD selling remains unabated.
• Fed independence fears and rate cut bets drag the USD to over a three-year low.
• The Israel-Iran truce caps the safe-haven CHF and helps limit losses for the major.

The USD/CHF pair remains depressed for the fourth consecutive day and touches a fresh low since September 2011, around the 0.8025 region during the Asian session on Thursday.

The US Dollar (USD) selling bias remains unabated amid concerns about the future independence of the Federal Reserve (Fed) independence, which, in turn, is seen as a key factor weighing on the USD/CHF pair. US President Donald Trump escalated his criticism of Fed Chair Jerome Powell for not cutting interest rates and called him terrible. Trump also floated the idea of firing Powell and said that he was considering several candidates as contenders for the top Fed job.

Meanwhile, traders have been betting that the Fed will lower rates by at least 50 basis points before the end of the year and are also pricing in a roughly 25% chance of a rate reduction in July. In contrast, the Swiss National Bank (SNB) signaled that it does not plan more interest rate cuts, disappointing investors expecting that rates might return to negative territory this year. This is seen as another factor that contributes to the weaker tone surrounding the USD/CHF pair.

However, the latest optimism over a ceasefire between Israel and Iran continues to underpin the global risk sentiment, which, in turn, is seen denting demand for traditional safe-haven assets. This holds back traders from placing aggressive bullish bets around the Swiss Franc (CHF) and helps limit losses for the USD/CHF pair. Traders now look to the US macro data - the final Q1 GDP, Weekly Initial Jobless Claims, Durable Goods Orders, and Pending Home Sales.

Apart from this, speeches from influential FOMC members would drive the USD and provide some impetus to the USD/CHF pair. The focus will then shift to the release of the US Personal Consumption Expenditure (PCE) Price Index on Friday. The crucial US inflation data would provide cues about the Fed's future rate-cut path, which, in turn, will play a key role in determining the next leg of a directional move for the Greenback and the currency pair.