USD/CHF looks to settle below 0.9200 as Powell’s testimony dictates a slight hawkish stance

• USD/CHF has slipped from 0.9240 on Powell’s cautious hawkish stance in his testimony.
• The odds of a 50 bps interest rate hike have been trimmed firmly.
• A slight tightening policy expectation has underpinned the risk-off impulse in the late American session.

The USD/CHF pair has witnessed a steep fall after attracting some significant offers near 0.9240. The major has been consolidating in the last few trading sessions amid obscurity over the interest rate decision and stance by the Federal Reserve (Fed) towards ultra-hot inflation and Ukraine crisis.

However, the strategic thinking of think tanks behind the monetary policy build-up is unfolding now as Fed chair Jerome Powell has provided various insights to the market participants in Wednesday’s testimony. Fed Powell in his testimony has been ‘loud and clear that an interest rate hike by 25 basis points (bps) is appropriate in March. No doubt, the doors of a 50 bps rate hike are still open but no mention of the 50 bps rate hike dictates that the Fed is not aggressively hawkish.

The risk-off impulse has rebounded on a slight hawkish stance in Powell’s testimony and risk-sensitive assets are underpinned.

Meanwhile, the US dollar index (DXY) finds barricaded near 98.00 as investors have preferred profit-booking on a cautious hawkish stance by the Fed.

On the Russia-Ukraine war agenda, US White House spokeswoman Jen Psaki said that while Washington was still considering hitting Moscow's vast energy sector over Russia's invasion of neighboring Ukraine, the impact on global oil markets and U.S. energy prices were a key factor, as per Reuters. This indicates that the US is open to imposing sanctions on Russia's oil and gas industry but considering its multiplier effects on global oil markets as West Texas Intermediate (WTI) oil has comfortably settled above $110.