USD/CHF struggles to recover from the previous day’s losses ahead of the release of the US Consumer Price Index (CPI), treading waters around 0.8910 during the early trading hours of the European session on Tuesday. The pair experienced downward pressure due to the lackluster performance of the US Dollar (USD) on Monday.
Additionally, the USD/CHF pair struggled, primarily influenced by the positive data from China, particularly a return to positive inflation territory. Furthermore, hawkish remarks from Bank of Japan (BoJ) Governor Kazuo Ueda contributed to USD weakness.
US Dollar Index (DXY), which measures the performance of the US Dollar (USD), beats higher at around 104.70. The Greenback is recovering losses due to the positive performance of United States (US) bond yields.
Nevertheless, the US Dollar (USD) bulls adopt a cautious stance ahead of the release of the significant US Consumer Price Index (CPI) data scheduled for Wednesday. This data release has the potential to influence market sentiment and impact the pair.
The market expects the headline Consumer Price Index (CPI) to show a 0.5% month-on-month increase, representing an improvement from the previous period’s 0.2% reading. While Core CPI figures are anticipated to stay unchanged at 0.2%.
It is worth noting that any deviations from these inflation figures have the potential to trigger rapid changes in market sentiment and influence the bias towards the US Dollar (USD).
The Greenback is projected to maintain its strength by effectively absorbing the impacts of higher interest rates. Furthermore, the currency could receive additional support from positive economic data coming out of the US.
