USD/CHF seesaws near 0.9000 ahead of Swiss Retail Sales, Fed’s favorite inflation clues

• USD/CHF prods two-day winning streak ahead of key Swiss, US data.
• Market sentiment remains dicey as traders struggle amid hawkish Fed bets and US data-led optimism.
• SNB’s Maechler advocates for higher rates but Fed policymakers stole the show.
• Swiss Retail Sales, US Core PCE Price Index will be crucial for intraday directions.

USD/CHF remains lackluster around the weekly top, recently making rounds to 0.8995-9000, as traders await the key Swiss and the US data amid early Friday. Also likely to have prod the Swiss Franc (CHF) pair could be the hawkish bias of the Swiss National Bank (SNB) and the Federal Reserve (Fed) officials, not to forget upbeat US data.

Although there were no major updates from Switzerland on Thursday, Wednesday’s hawkish speech from SNB Governing Board member Andrea Maechler prods the USD/CHF bulls at the weekly top. “Swiss inflation is broad-based and more persistent than anticipated,” said SNB’s Maechler.

On the other hand, Fed Chair Jerome Powell spoke at the Fourth Conference on Financial Stability hosted by the Bank of Spain, in Madrid, while saying, “A strong majority of Fed policymakers expect two or more rate hikes by year-end.” Additionally, Atlanta Federal Reserve President Raphael Bostic told reporters regarding future rate increases, as reported by Reuters, that he doesn’t see as much urgency to move as stated by others, including Chairman Jerome Powell. The policymaker, however, recently took a U-turn while saying, “I think it's unambiguous that inflation has fallen considerably."

It should be noted that the US data was mostly upbeat and helped the USD/CHF bulls. On Thursday, the US Gross Domestic Product (GDP) Annualized, mostly known as the Real GDP, grew at the 2.0% rate for the first quarter (Q1) of 2023 versus the 1.3% initial estimation. Further, the US Weekly Initial Jobless Claims slumped to 239K for the week ended on June 23 compared to 265K expected and revised prior. However, the Personal Consumption Expenditure (PCE) Price for Q1 2023 eased to 4.1% QoQ from 4.2% expected and prior whereas the Pending Home Sales slumped to -2.7% MoM for May compared to 0.2% expected and -0.4% prior (revised).

Amid these plays, Wall Street closed positive but the US 10-year and two-year Treasury bond yields also rallied while the US Dollar Index (DXY) refreshed its weekly top before retreating to 103.40. It should be noted that the S&P500 Futures print mild gains by the press time.

Looking ahead, Swiss Real Retail Sales for May, expected -2.5% YoY versus -3.7% prior, will offer immediate directions ahead of and the Federal Reserve’s (Fed) favorite inflation gauge, namely the US Core Personal Consumption Expenditure (PCE) Price Index, for May. That said, the US Core PCE Price Index is likely to remain static at 0.4% MoM and 4.7% YoY, which in turn may allow the Fed to keep its hawkish bias and propel the USD/CHF.

Technical analysis

The first daily closing beyond the 50-DMA, around 0.8980 by the press time, in 12 days keeps the USD/CHF buyers directed towards the monthly resistance line, near 0.9040 at the latest.