During Wednesday’s Asian trading hours, the USD/CHF pair experienced a second consecutive session of decline, hovering around the 0.9060 mark. The dip in the USD/CHF pair can be attributed to the softening of the US Dollar (USD), with investors largely disregarding the higher-than-anticipated US Producer Price Index (PPI) data for April. Market participants are likely to await the release of the Consumer Price Index (CPI) report scheduled for Wednesday for further direction.
The US Bureau of Labor Statistics (BLS) reported a 0.5% month-on-month increase in the Producer Price Index (PPI) for April, surpassing market expectations of a 0.3% rise. This rebound follows March’s contraction of 0.1%. Additionally, the Core PPI, excluding volatile food and energy prices, also saw a 0.5% month-over-month surge, surpassing projections of 0.2%.
Federal Reserve Chair Jerome Powell shared his post-US PPI release perspectives, as reported by Reuters. Powell anticipates a continued decline in inflation and expressed less certainty in the disinflation outlook compared to previous assessments. He also noted an expected Gross Domestic Product (GDP) growth rate of 2% or higher, attributing this positive outlook to the robustness of the labor market.
In Switzerland, the Producer and Import Prices (YoY) declined by 1.8% in April, showing a slight improvement from the previous drop of 2.1%. This marks the twelfth consecutive period of decline, albeit at the slowest rate since December 2023. On a monthly basis, the measure of consumer price inflation recorded a 0.6% increase, following a 0.1% rise in the previous month.
Traders are anticipated to closely monitor the Industrial Production (YoY) report for the first quarter, scheduled for release on Friday. This report will offer insights into production volume across various sectors, including factories and manufacturing, in Switzerland.
