USD/CHF to display rangebound auction around 0.9250 ahead of Swiss Inflation

• USD/CHF is expected to remain lackluster around 0.9250 as investors await Swiss CPI data.
• An increment in Swiss inflation will attract more rate hikes from the SNB.
• The FOMC minutes will provide a detailed version of December’s monetary policy meeting.

The USD/CHF pair is likely to display a lackluster performance ahead around 0.9250 amid festive mood in various potential markets. Also, the Swiss franc asset is expected to remain sideways as investors are awaiting the release of the Swiss Consumer Price Index (CPI) data for fresh impetus.

Meanwhile, the US Dollar Index (DXY) is aiming to extend its downside journey to near the round-level support of 103.00 amid a decline in safe-haven’s appeal. The mighty USD Index faced immense pressure on Friday after surrendering the crucial support of 103.40. Also, a fresh decline in the inflationary pressures in the United States has weakened its appeal for the USD Index.

S&P500 sensed a minor sell-off on Friday as investors turned cautious after commentary from the International Monetary Fund (IMF). Managing Director Kristalina Georgieva of the IMF cited on the CBS Sunday morning news program that “For much of the global economy, 2023 is going to be a tough year as the main engines of global growth - the United States, Europe, and China – all may experience weakening activity,”.

On the Swiss Franc front, the release of the inflation data will hog the limelight. According to the estimates, the inflation data (Dec) will escalate to 3.4% against the former release of 3.0% on an annual basis. Escalation in the Swiss inflation data might attract more policy hikes from the Swiss National Bank (SNB) ahead.  In December’s monetary policy meeting, SNB Chairman Thomas J. Jordan opened the gates for more policy tightening despite hiking interest rates further by 50 basis points (bps) to ensure price stability.

The USD Index may display an informed move after the release of the Federal Open Market Committee (FOMC) minutes. The FOMC minutes will provide a detailed explanation behind the announcement of the interest rate hike of 50 bps by the Federal Reserve (Fed) in its December monetary policy meeting.