USD/CHF hovers above 0.9000, focus on US CPI, Swiss Producer and Import Prices

• USD/CHF continues the losing streak on the Fed’s interest rate trajectory.
• US Dollar extends losses despite robust wholesale inflation data.
• US CPI suggests a decrease in the annual rate for September.
• Swiss Franc might receive buying support on the Middle-East conflict.

USD/CHF continues to move on the downward trajectory that began last week, trading lower around 0.9010 during the Asian session on Thursday. The pair trades near the three-week lows. Despite robust economic data from the United States (US), the US Dollar (USD) is facing challenges due to the possibility of the Federal Reserve (Fed) ending the rate-hike cycle.

Moreover, the divergence in perspectives is revealed in the Federal Open Market Committee (FOMC) minutes. The Fed minutes emphasized the significance of relying on data. There was a suggestion that achieving a substantial increase in inflation would be crucial to garnering consensus for shaping monetary policy decisions.

US Producer Price Index (PPI) experienced a rise in September, jumping from 2.0% to 2.2%, surpassing the expected 1.6%. Attention in the market now turns to Thursday's Consumer Price Index (CPI) release, with forecasts indicating a potential decrease in the annual rate from 3.7% to 3.6%. Keep an eye out for the upcoming weekly Jobless Claims report as well.

Amidst dovish comments and neutral stances from officials, investors seem to speculate the US Federal Reserve (Fed) to abandoning the idea of a rate hike. Fed Governor Christopher Waller advocates a cautious stance on rate developments, suggesting that tightening in financial markets "would do some of the work for us."

Fed Governor Michelle Bowman leans towards another rate hike, citing persistent inflation above the Fed's 2% target. These divergent views within the Federal Reserve add layers of complexity to the current economic landscape.

The US Dollar Index (DXY) is facing challenges, trading lower around 105.70 at the time of writing. This struggle is attributed to the subdued performance of US Treasury yields, with the 10-year Treasury bond yield standing at 4.57% by the latest update.

On the flip side, the Swiss Franc seems to receive buying support due to the Middle-East military conflict as the currency is considered to be the safe haven in times of geopolitical uncertainty.

Switzerland’s Producer and Import Prices will be eyed on Friday, which could provide fresh impetus to the inflation outlook in the nation.