The USD/CHF pair is trading positively around 0.8575 in early European session on Wednesday, bolstered by a firmer US Dollar (USD) as market expectations for aggressive Federal Reserve (Fed) rate cuts diminish. The focus will soon shift to the release of the Federal Open Market Committee (FOMC) Minutes later today.
A stronger-than-expected jobs report released last Friday has provided support for the Greenback, prompting traders to reassess the scale of anticipated interest rate reductions. Boston Fed President Susan Collins indicated that further rate cuts may be forthcoming as inflation trends weaken, while Atlanta Fed President Raphael Bostic noted that the robust job market shows no signs of weakening, even as inflation remains above target levels.
Attention will also be directed toward the US Consumer Price Index (CPI) report scheduled for Thursday, which could offer insights into the Fed’s easing cycle. The headline CPI is projected to rise by 2.3% year-on-year in September, with the core CPI estimated to increase by 3.2%. Signs of easing inflation could potentially weigh on the USD and limit further gains in the USD/CHF pair.
In geopolitical news, Hezbollah’s senior leader expressed support for efforts to achieve a ceasefire in Lebanon, marking a significant shift as it conditions the truce on factors beyond the Gaza conflict. While this development may alleviate fears of an expanded conflict in the Middle East, ongoing geopolitical risks could still drive safe-haven flows toward the Swiss Franc (CHF).
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