Swiss franc dipped a bit on Thursday against a basket of major rivals, extending losses for the sixth straight session against the dollar, and hovering near a four-week trough after Swiss National Bank Governor Thomas Gordon's remarks on rethinking forex policies.

Hopes for a reduced interest rate gap between Switzerland and the US faded as the odds of early US interest rate cuts this year subside. 

USD/CHF 

USD/CHF rose 0.1% to 0.8651, with a session-low at 0.8633, after closing down 0.3% on Wednesday, the fifth loss in a row, plumbing a four-week trough at 0.8685. 

Thomas Gordon 

SNB Governor Thomas Gordon said the franc has experienced a nominal increase in value, which was beneficial in protecting against inflation. 

Gordon added that in the last two weeks, the real value of the currency increased, making conditions for local companies more difficult. 

He said the SNB will take the currency's recent strength in consideration starting at the March 21 meeting. 

Interest Rate Gap

The current interest rate gap between the US and Switzerland stood at 375 basis points in favor of the US, and markets hoped for a reduction to 350 points next March when the Fed is supposed to start cutting rates, however, the odds of such a move declined. 

Estimates 

Analysts said there's a chance the SNB might cut its inflation forecasts in March due to the recent spike in franc's value. 

The SNB could then focus on interest rate cuts, with the first interest rate cut expected to occur in June. 

Palladium prices extended their decline on Wednesday as the dollar rose against a basket of major rivals, with concerns persisting about China after disappointing data.

Copper three-month futures fell 0.7% at the London Metals Exchange to $8300 a tonne, approaching December 7 lows. 

China's GDP growth data missed growth forecasts, with yet more pessimistic data about the real estate sector, with sales tumbling by 23% in December. 

Analysts continue to warn from the potential fallout from the declining real estate market, as government stimulus fails to underpin the sector.

At the Shanghai Futures Exchange, copper March futures fell 0.1% to 67,720 yuan a tonne. 

Ten non-ferrous metals had their production increasing by nearly 7.1% in 2023 to 74.7 million tonnes, a record high.

Otherwise, the dollar index hit a one-month high following bullish remarks from Fed officials Christopher Waller, which hurt the odds of early US interest rate cuts.

Most metals suffered at the London's Exchange, with aluminium falling 1.2% to $2188 a tonne, as zinc fell 1.9% to $2499, as nickel shed 0.3% to $16,095, while lead shed 1.9% to $2065, while tin rose 0.1% to $25210. 

Otherwise, the dollar index rose 0.2% to 103.5 as of 16:38 GMT, with a session-high at 103.6, and a low at 103.2. 

Palladium March futures fell 1.1% to $928 an ounce as of 16:39 GMT. 

Dollar rose in European trade on Wednesday against a basket of major rivals, extending gains for the fourth straight session, and hitting a five-week high on strong demand.

US yields extended their gains after bullish remarks by Fed member Christopher Waller on the future of US interest rates, which hurt the prospects of early rate cuts. 

Now traders are looking to assess fresh US data on retail sales later today, in addition to new remarks by Fed officials.

The Index

The dollar index rose 0.2% to 103.58, the highest since December 13, with a session-low at 103.26. 

The index rose 0.7% yesterday, the largest profit since January 2. 

US Treasury Yields 

US 10-year treasury yields rose 0.4% on Wednesday, maintaining gains for the second session and approaching a one-week high at 4.083%, underpinning the dollar. 

Fed Remarks 

Federal Reserve member Christopher Waller said the US is close to achieving its 2% target inflation in the medium term, but the Fed still can't rush into early rate cuts.

He asserted the need for more information in upcoming months to ensure that inflation has sustainably declined.

US Rates

Following the bullish remarks, the odds for a 0.25% interest rate cut at the March meeting fell to 65%.

Now investors await important US retail sales and industrial production data to gather clues on the likely path ahead for policies.

Retail Sales 

Investors await crucial US retail sales later today, expected to have increased by 0.4% last month, up from 0.3% in November, while core sales are expected up 0.2%. 

US 10-year treasury yields rose for the second straight session above 4% on track for more gains in upcoming weeks. 

The gains came after remarks by Fed officials that indicated there would be no early interest rate cuts this year. 

US Yields

US 10-year treasury yields rose 0.4% today to 4.079%, with a session-low at 4.037%, after rising 2.9% on Tuesday, the biggest profit in 2024, and the largest since November. 

Fed Remarks

Federal Reserve member Christopher Waller said the US is close to achieving its 2% target inflation in the medium term, but the Fed still can't rush into early rate cuts. 

He asserted the need for more information in upcoming months to ensure that inflation has sustainably declined. 

US Rates 

Following the bullish remarks, the odds for a 0.25% interest rate cut at the March meeting fell to 65%.

Now investors await important US retail sales and industrial production data to gather clues on the likely path ahead for policies.