The USD/CHF pair maintains its upward trajectory for the third consecutive session, hovering around the 0.9090 level during Asian trading hours on Tuesday. The Swiss Franc (CHF) faces pressure against the US Dollar, propelled by cautious sentiments from Federal Reserve (Fed) officials regarding inflation.
Federal Reserve Vice Chair Philip Jefferson reiterated the Fed’s commitment to maintaining higher interest rates for an extended period to counter elevated inflation levels. This stance has bolstered the US Dollar against the Swiss Franc.
Traders are closely monitoring the US Producer Price Index (PPI), a crucial economic indicator whose release is anticipated to influence the market significantly. The PPI data will provide insights into potential outcomes for the Consumer Price Index (CPI). A better-than-expected PPI report could further bolster the US Dollar’s position.
On the Swiss economic front, the SECO Consumer Climate (YoY) witnessed a marginal decline in April, registering a reading of -38.1, significantly below the long-term average. Additionally, Tuesday will see the release of Producer and Import Prices data for April by the Federal Statistical Office of Switzerland, offering insights into consumer price inflation trends.
The Swiss Franc faces headwinds as the Swiss National Bank (SNB) shifts its focus from deliberately strengthening the currency to tackling inflationary pressures. Notably, the SNB’s foreign exchange reserves climbed to CHF 720 billion in April, marking the fifth consecutive monthly increase. This redirection of attention by the central bank may further dampen the Swiss Franc’s performance.
