USD/CHF remains capped below the 0.9200 barrier ahead of the Swiss CPI data

• USD/CHF remains confined in a narrow range around 0.9184 on Tuesday.
• Business conditions in the US manufacturing sector continued to contract in September.
• Biden administration has warned China that additional semiconductor export curbs are due early this month.
• Market players will focus on the Swiss inflation data, US JOLTS Job Openings.

The USD/CHF pair holds positive ground for two straight days but remains capped below the 0.9200 barrier during the early Asian session on Tuesday. The uptick of the pair is bolstered by the firmer US dollar (USD), higher US Treasury yield, and the hawkish comments from the Federal Reserve (Fed) officials. The pair currently trades near 0.9184, gaining 0.02% on the day.

The Federal Reserve (Fed) Bank of Cleveland President, Loretta Mester, stated earlier on Tuesday that the Fed will likely need to raise interest rates again this year and that the Fed's monetary policy path will depend on how the economy performs. In addition, Fed Governor Michelle Bowman stated on Monday that it will likely be necessary to raise the policy rate further and maintain it at restrictive levels for an extended period of time.

Fed Vice Chair for Supervision Michael Barr stated that monetary policy should be approached with caution. He stated that the most important question is not how much interest rates will rise, but how long they will remain at a sufficiently restrictive level.

About the data, the Institute for Supply Management (ISM) showed on Monday that business conditions in the US manufacturing sector continued to contract in September. The US ISM Manufacturing PMI came in at 49.0 in September from 47.6 in August, beating the market expectation of 47.7. Furthermore, the Prices Paid Index fell from 48.4 to 43.8. The Employment Index climbed from 48.4 to 51.2. Finally, the New Orders Index grew from 46.8 to 49.2.

On the other hand, the Swiss Consumer Price Index (CPI) will be released later on Tuesday. The annual figure is expected to rise 1.8% in September from 1.6% in the previous reading while the monthly figure is expected to stay at 0% in September to 0.2% in August.

Apart from this, the Biden administration has warned China that additional export restrictions on AI chips and chipmaking tools to China are due early this month, per Reuters. This would be an update around the one-year anniversary of the initial unveiling of the measures on October 7, 2022. The exacerbating tension between the world’s two largest economies should dampen market optimism. This, in turn, might benefit the traditional safe-haven Swiss Franc and act as a headwind for the USD/CHF pair.

Moving on, market participants will monitor the Swiss Consumer Price Index (CPI) for September and the US JOLTS Job Openings for August due on Tuesday. Later this week, the US ISM Services PMI and ADP report will be released on Wednesday. The highlight of the week will be the US Nonfarm Payrolls on Friday. These events could give a clear direction to the USD/CHF pair.