USD/CHF retreats from 0.9300 on weakening safe-haven appeal amid easing Russia-Ukraine tensions

• USD/CHF retreated from 0.9300 on a positive undertone in the market amid ceasefire expectations.
• The DXY is settling below 98.00 despite the expectations of an aggressive interest rate hike.
• Investors will focus on stipulations by Russia in a ceasefire scenario during Putin-Zelenskyy peace talks.

The USD/CHF pair attracted significant offers near 0.9300 as investors shifted to risk-perceived assets on easing Russia-Ukraine tensions. Ukraine President Volodymyr Zelenskyy has agreed to a diplomatic situation for a ceasefire and a halt on the ongoing slaughter of Ukraine’s economy.  

Earlier, investors preferred the greenback against the Swiss franc on the escalation of the Russia-Ukraine war. The situation got worsened when the US prohibited Russian oil imports. The decision was supported by the Western allies as per their current capacity to co-operate. However, the gesture of compromise by Zelenskyy to save its arena has brought a win-win situation for the market. Risk-sensitive assets have found bids and positions in safe-haven assets have been trimmed after a juggernaut rally.

The Ukraine President has agreed to withdraw its membership application to NATO. Now investors will focus on stipulations to be dictated by the Kremlin upon agreement of a truce with Ukraine.

Meanwhile, focus shifts to the US dollar index (DXY), which looks to settle below 98.00 amid the weakening appeal of safe-haven assets. Investors are expecting an interest rate decision of 50 basis points (bps) hike in the March monetary policy meeting. To comply with the soaring inflation, Federal Reserve (Fed) may not take the bullet this time and gung ho on the restriction of liquidity injection in the economy.

The headlines from the Russia-Ukraine war still hold importance for the FX domain despite a highly likely ceasefire between the nations. Adding to that, investors will also focus on US Consumer Price Index (CPI) numbers and Initial Jobless Claims, which are due on Thursday. While the Swiss docket will report Trade Balance later next week.