Created on December 27, 2024

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• The US dollar has initially tried to rally a bit against the Swiss franc, but we’re just killing time here at the 0.90 level, which makes a certain amount of sense.
• No one is trading this time of year. So, I think sideways action is probably what you can expect.
• A bit of a fall from here makes a certain amount of sense as we might go looking towards the closest area of interest, which is the 0.89 level, but I wouldn’t read anything into that other than a lack of momentum and liquidity.

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With that being the case, you’ve got a situation where traders will continue to look at dibs as buying opportunities from what I can tell, because interest rates are up a full percent in the United States despite the fact that the Federal Reserve has decided to cut interest rates. So, what does that tell you?

Bonds. Yes, Bonds.

That tells you that the bond market is dictating everything right now, and the markets are listening. So if interest rates continue to climb in America, the US dollar goes higher. That’s it. It’s the end of it. And at this point in time, it doesn’t look like they’re going down anytime soon. And at the same time, we have the Swiss National Bank doing nothing, even remotely close to being hawkish. And in fact, the last meeting that they had was a 50 point basis cut showing signs of fear.

So, if that’s going to be the case, I do think that anytime this market pulls back, you will have buyers looking to step in and take advantage of cheap dollars. I certainly wouldn’t have any interest in trying to own the Swiss franc right now as it is going to be losing value for quite some time. That doesn’t mean that there won’t be the occasional downdraft, but I do think the bottom has been put in and now we are working on an uptrend.

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