USD/CHF tumbles below 1.0020 as DXY weakens, the spotlight is on US Retail Sales

• USD/CHF has slipped below 1.0020 ahead of the US Retail Sales.
• A light economic calendar has brought some exhaustion to the DXY’s rally.
• The quarterly Swiss Industrial Production will be the major trigger for the Swiss franc.

The USD/CHF pair has witnessed a minor correction after printing a fresh two-year high of 1.0064 on Monday. A rebound in the risk-on impulse has supported the risk-perceived currencies, which has underpinned the Swiss franc against the greenback.

The US dollar index (DXY) has remained firmer over the past few trading weeks amid expectations of two more 50 basis points (bps) rate hikes by the Federal Reserve (Fed) in its next monetary policy meetings. Now, the unavailability of any major trigger in the US economic calendar has brought some profit-booking to the counter.

The DXY is facing some signs of exhaustion after hitting a 19-year high of 105.00 last week. In today’s session, investors will keep an eye on US Retail Sales. The monthly Retail Sales figure is seen at 0.7% against the prior print of 0.5%. A higher-than-expected figure may support the DXY and renewal of a multi-year high could be seen.

On the Swiss franc front, a prolonged prudent monetary policy by the Swiss National Bank (SNB) to support the aggregate demand will continue to keep the Swiss franc on the sidelines. Inflation levels are rock-bottom, which may not compel SNB policymakers to adopt a hawkish tone. Going forward, the Swiss Statistics will report the quarterly Industrial production data on Friday. Previously, the Swiss agency reported the quarterly Industrial Production at 7.3%.