USD/CHF consolidates above 0.8800, focus on US, Swiss GDP data

• USD/CHF oscillates in a narrow range of 0.8800-0.8825 in Monday’s early European session. 
• The upbeat US inflation data and hawkish comments from Fed officials prompted markets to lower bets on rate cuts this year. 
• The rising geopolitical tension in the Red Sea might lift a safe-haven currency like the Swiss Franc (CHF). 

The USD/CHF pair trades sideways above the 0.8800 mark during the early European session. The US and Swiss Gross Domestic Product (GDP) for the fourth quarter (Q4) could provide a clear direction to the pair. The annualized US GDP growth number is estimated to remain steady at 3.3%. USD/CHF currently trades around 0.8811, unchanged for the day. 

The US inflation data in January and the cautious comments from Federal Reserve (Fed) officials have prompted markets to pull back expectations on rate cuts. Investors expect three interest rate cuts for 2024, down from six cuts anticipated in December. 

Investors will closely watch the US Personal Consumption Expenditures Price Index (Core PCE), the Fed’s preferred inflation measure, due on Thursday. The report could offer some hints as to whether inflation is easing or elevated. The stronger data might lift the Greenback against its rivals. 

The United States and Britain hit 18 Houthi targets in Yemen, responding to a recent rise in attacks on ships in the Red Sea and Gulf of Aden by the Iran-backed militia group, including a missile strike this week that set fire to a cargo tanker. The rising geopolitical tension in the Red Sea might boost a safe-haven currency like the Swiss Franc (CHF) and act as a headwind for the USD/CHF pair.

Looking ahead, the US Durable Goods Orders and Consumer Confidence will be due on Tuesday. On Wednesday, the US GDP growth numbers for Q4 will be released. The Swiss GDP report and the US Q4 Core Personal Consumption Expenditures Price Index (Core PCE) on Thursday will be the highlights this week.