A combination of factors dragged USD/CHF lower
The USD/CHF pair dropped to over a one-week low during the European session, with bears now awaiting sustained weakness below the 0.9300 mark. The pair struggled to capitalize its modest intraday gains to mid-0.9300s and drifted into the negative territory for the fourth successive day on Monday. The worsening situation in Ukraine tempered investors' appetite for perceived riskier assets, which was evident from the prevalent cautious mood around the equity markets. This, in turn, benefitted the Swiss franc's safe-haven status and exerted some downward pressure on the USD/CHF pair amid subdued US dollar price action.
The corrective pullback dragged spot prices further away from the 11-month peak, around the 0.9460 region touched last week, though any further downside is more likely to remain limited. The Fed's hawkish outlook, indicating that it could raise rates at all the six remaining meetings in 2022, should act as a tailwind for the USD. Moreover, two influential FOMC members said on Friday that the US central bank needs to adopt a more aggressive policy stance to combat stubbornly high inflation. This, in turn, favors the USD bulls and should lend support to the USD/CHF pair.