The USDCHF pair reached parity for the first time since December of 2019 amid the significant divergence in policy between the US and Swiss central bank. Recently the Federal Reserve signaled a more hawkish approach as latest data showed that inflation will remain elevated in the upcoming months. Meanwhile, inflation in Switzerland in April rose slightly to a 13-year high of 2.5%, which is considerably lower compared to the US and other developed nations. SNB believes that current level is only a temporary phenomenon and therefore plans to stick to its ultra-loose monetary policy.
USDCHF pair rose over 9.0% since the beginning of 2022 and reached parity on Thursday, which coincides with the upper limit of the 1:1 structure. If current sentiment prevails, upward move may accelerate towards 1.0230 level, where highs from May 2019 are located. On the other hand, if sellers regain control, downward correction towards 0.9740 may be launched. Source: xStation5