USD/CHF Forecast 09/10: Carry Trade Keeps Dollar Bullish

(MENAFN- Daily Forex) The US dollar continues to see upward pressure as rates favor America over Switzerland.

USD/CHF

The U.S. dollar has rallied against the Swiss franc again during the trading session here on Thursday, as rates continue to rise slightly. Therefore, it pays to hold dollars against Swiss francs, and this makes it a very easy carry trade.

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Nonetheless, this is a market that I think ultimately will be more of a buy-the-dip type of setup. It will be a grind; it will not be something that is explosive, at least not in my estimation. Short-term pullbacks, I do think, will continue to attract a lot of attention, with the Swiss National Bank having no interest whatsoever in trying to raise rates question is whether or not it will happen in October or December

The Federal Reserve probably will raise rates by the end of the year. The FOMC meeting minutes that were released yesterday did suggest that several members believe that we need a second interest rate hike following the last move that we just had at the recent meeting.

The question is whether or not it will happen in October or December, but nonetheless, against the Swiss franc itself, it is doing quite well. This is not really a concern as to whether or not it is the October meeting or December. It just seems to be a known quantity, and even if they did not raise rates in America, the differential is so wide, with the Swiss National Bank working against raising rates, that it makes no sense whatsoever to short this pair unless there is a run to the Swiss franc for safety.

EURUSD Chart by TradingView

It seems as if the market is more worried about getting paid than safety, regardless of all of the chaos going on around the world. So, I believe that this is a slow and steady bullish market.

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