USD/CHF eyes to recapture weekly highs at 0.9660 ahead of Swiss inflation

• USD/CHF is aiming to reclaim 0.9659 on the souring market mood.
• The Swiss inflation is expected to improve to 2.6% vs. 2.5% recorded earlier.
• The DXY  has strengthened on advancing bets over a hawkish Fed policy.

The USD/CHF pair is trading lackluster around 0.9630 as investors are awaiting the release of the Swiss Consumer Price Index (CPI), which is due in the European session. The Swiss inflation is seen at 2.6% on annual basis, higher than the prior print of 2.5%. While the monthly CPI may decline to 0.3% vs. 0.4%. No doubt the CPI rate in the Swiss is is advancing gradually, but a hawkish stance by the Swiss National Bank is still not in consideration.

This week, the Swiss franc failed to capitalize on upbeat Gross Domestic Product (GDP) numbers. The annual figure jumped to 4.4%, in line with the estimates but higher than the previous figure of 3.6%. Also, the quarterly figure climbed to 0.5% vs. the forecast of 0.4% and the former print of 0.2%.

The pair has displayed a corrective move after hitting a weekly high of 0.9659. More upside is expected from the asset as a rebound in the risk-off impulse has underpinned the safe-haven assets.

Meanwhile, the US dollar index (DXY) is gearing up for resuming the bullish trend on expectations of an extreme hawkish stance from the Federal Reserve (Fed). Taking into account, the stability of the inflation figure above 8% and the tight labor market, a rate hike is highly needed to safeguard the pockets of the households.

Investors’ focus will remain on the release of the US Nonfarm Payrolls (NFP), which are due on Friday. A dismal performance is expected from the economic catalyst as the data is seen at 325k against the prior print of 428k.