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Qatari Emirs Palace: The Emir of Qatar and US President Trump discussed de-escalating regional tensions and ensuring energy market stability in a phone call.Ukrainian Prime Minister: He and Besente discussed in detail the necessity of strengthening sanctions against Russia.On April 16th, Federal Reserve Chairman Mohamed Mussaleem stated on Wednesday that high oil prices could push core inflation nearly one percentage point above the Feds 2% target for the remainder of the year, potentially requiring the Fed to maintain interest rates. Mussaleem said, "We are likely to see some transmission of oil prices to core inflation," and that by the end of the year, the underlying measure of price increases will be "slightly below 3%, perhaps around 3%," with further upside risks. Mussaleem said the Fed is likely to keep its policy rate in its current 3.50%-3.75% range "for some time," while monitoring inflation, employment, and economic data in the coming months—a view shared by many of his colleagues. The impact of last years tariff increases may be fading this quarter, and housing price inflation is also weakening. With rising oil prices, inflation in a range of service sectors remains high, and he would be open to raising interest rates if inflation starts to rise and potentially boost inflation expectations. Mussaleem also stated that the oil market represents "the third negative supply shock in 12 months," and coupled with rising tariffs and stricter immigration regulations, the inflation outlook and the job market face risks, potentially impacting economic growth. He believes that economic growth will slow this year, but will still be between 1.5% and 2%.According to MS Now, citing two Pakistani officials, the US and Iran may return to Pakistan next week for negotiations.On April 16, it was reported that on April 15 local time, a majority of U.S. senators expressed support for President Trumps military action against Iran. The Senate voted 52 to 47 to reject a Democratic-led resolution aimed at preventing war until hostilities were authorized by Congress.

USD/CHF Steady at 1.0020 as DXY Pauses, Powell and US Retail Sales Take Center Stage

Daniel Rogers

May 16, 2022 10:46

The USD/CHF pair is bouncing within a small range between 1.0020 and 1.0030 in early Tokyo, as the US dollar index (DXY) is not gaining much traction due to Monday's light economic calendar. Although broad-based fundamentals continue to favor the dollar bulls, the Federal Reserve (Fed) is projected to raise interest rates by another significant number in June in an effort to limit the inflation issue.

 

Last week, Fed's Powell's interview with the national radio show Marketplace revealed the ongoing conversations among Fed policymakers regarding anticipated rate hikes in monetary policies. Fed Powell indicated that the Fed could declare two additional rate hikes in the next two consecutive monetary policy sessions in order to tame the soaring inflation.

 

In the meantime, the US dollar index (DXY) is poised between 104.46 and 104.60 after reaching a new 19-year high of 105.00 on Friday. The DXY appreciates the broader gains but requires further triggers to maintain strong. In the future, two significant events on Tuesday will keep investors occupied. First will be Fed Chairman Powell's speech, which will likely influence monetary policy action in June. The second significant event is the monthly US Retail Sales report, which is anticipated to increase by 0.7% from the previous reading of 0.5%.

 

In terms of the Swiss franc, Friday's Industrial Production data will be the focal point. The catalyst reached 7.3% the previous time. A greater-than-anticipated number will strengthen the Swiss franc against the U.S. dollar. 

USD/CHF

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