USD/CHF steadies around 1.0020 as DXY pauses, Fed’s Powell and US Retail Sales in focus

• USD/CHF is hovering around 1.0020 amid a light economic calendar on Monday.
• Fed Powell has hinted at two more jumbo rate hikes by the end of the year.
• An outperformance is expected from the US Retail Sales as it may land at 0.7% on monthly basis.

The USD/CHF pair is oscillating in a narrow range of 1.0020-1.0030 in early Tokyo as the US dollar index (DXY) is not getting much traction amid the light economic calendar on Monday. Although broad-based fundamentals are still favoring the greenback bulls as the Federal Reserve (Fed) is expected to paddle up the interest rates by one more big number in June to contain the inflation mess.

Last week, Fed’s Powell interview with the Marketplace national radio program unveiled the ongoing discussions between the Fed policymakers over the rate hikes in upcoming monetary policies. Fed Powell dictated that the Fed could announce two more bumper rate hikes in the next two monetary policy meetings consecutively to rein in the roaring inflation.

Meanwhile, the US dollar index (DXY) is balancing in a 104.46-104.60 range after printing a fresh 19-year high of 105.00 on Friday. The DXY is enjoying the broader strength but seeks more triggers to sustain strength. Going forward, two major events on Tuesday will keep investors busy. First will be the speech from Fed Powell, which will dictate the likely monetary policy action in June. The second important event is monthly US Retail Sales, which is seen at 0.7% against the prior print of 0.5%.

On the Swiss franc front, Friday’s Industrial Production data will hog the limelight. The catalyst landed at 7.3% last time. A higher-than-expected figure will support the Swiss franc against the greenback.