- USD/CHF is eyeing 0.9300 as fears amid the Russia-Ukraine war intensify post-nuclear deterrent.
- The risk-off impulse has underpinned the greenback against the Swiss franc.
- Investors have overlooked the expected Moscow-Ukraine negotiations without preconditions.
The USD/CHF has opened on a cautious note on Monday but bounced back after sensing some significant bids around 0.9250 as investors underpin the greenback after the escalation in the Russia-Ukraine war. The former has threatened Ukraine with a nuclear attack. Although, this is an announcement yet by Russian leader Vladimir Putin the man is no joke and the Western leaders have nothing but to take his threats seriously.
Putin’s nuclear deterrent on Ukraine has set a risk-off impulse in the market. Meanwhile, the nations are ready for negotiations without preconditions but investors seem to overlook the negotiations’ headlines and focus on a potential nuclear threat in isolation by the press time.
Post the sanctions imposed on Russia, the financial system has been disrupted as US President Joe Biden disconnected several Russian banks from the SWIFT international payments system. The Russian citizens are rushing for liquidity on ATMs as fears intensify amid the collapse of their international banking infrastructure.
Apart from the risk-off impulse, the greenback has been preferred against the Swiss franc on expectations of an aggressive tightening policy by the Federal Reserve (Fed). The monetary policy meet by the Fed is due in March and its members may vote for an aggressive policy to get a grip over soaring inflation.
On the data front, the Swiss docket will report the quarterly Gross Domestic Product (GDP) numbers on Monday, which are seen at 0.4% QoQ in Q4 2021, lower than the previous print of 1.7%.