USD/CHF maintains position near 0.9050 ahead of the US Core PPI, FOMC minutes

• USD/CHF experienced challenges due to the dovish remarks by the Fed.
• The escalation of the Middle-East conflict could contribute support for the Swiss Franc.
• Investors await Core PPI and FOMC minutes, seeking fresh impetus on inflation overview in the US.

USD/CHF trims intraday losses to halt the losing streak, hovering around 0.9050 during the early European session on Wednesday. The pair is receiving support around the region at the three-week low.

Moreover, the USD/CHF pair is facing challenges due to the correction in the US Dollar (USD), which could be attributed to the possibility of a pause in the interest rate-hike cycle by the US Federal Reserve (Fed). This sentiment is driven by recent dovish comments from Fed officials, suggesting a more cautious stance on monetary policy.

A slew of dovish remarks from the Fed officials, expressing concerns about higher long-term US Treasury yields, is shaping the monetary policy narrative.

Atlanta's Fed President Raphael Bostic's assertion that the current policy is already restrictive, coupled with similar sentiments from other Fed colleagues, suggests a cautious approach to further rate hikes.

Moreover, the escalation of the Palestine-Israel military conflict could contribute to pressure on the USD/CHF pair. In times of geopolitical uncertainty, safe-haven currencies like the Swiss Franc often attract buying support.

The US Dollar Index (DXY) hovers around 105.80 with a negative bias. The 10-year US Treasury bond yield stands at 4.62% by the press time.

Investors await the upcoming economic data, with Wednesday featuring the Producer Price Index (PPI) following the release of the FOMC meeting minutes and Thursday bringing the Consumer Price Index (CPI). On the Swiss docket, Producer and Import Prices will be eyed on Friday.