USD/CHF extends losses to near 0.9000 amid soft US Dollar, US CPI data eyed

• USD/CHF drops vertically to near 0.9000 as the US Dollar remains soft.
• Investors expect that the impact of the Israel-Hamas conflict would be lower if more players do not intervene.
• The US PPI report remained hotter than anticipated due to higher gasoline and food prices.

The USD/CHF pair continues its six-day losing spell and drops to near the psychological support of 0.9000. A steep sell-off in the Swiss Franc asset came due to the soft US Dollar as investors are anticipating that the Federal Reserve (Fed) will keep interest rates unchanged in November. This would buy some time to assess the impact of interest rate hikes till done.

S&P500 futures added some decent gains in the London session, portraying cheerful market sentiment due to fading hawkish Fed bets. Also, investors expect that the impact of the Israel-Hamas conflict would be lower if more players do not intervene. Apart from that, Israel is not an oil-rich nation, therefore, the consequences on the oil price could be limited.

In addition to the correction in the US Dollar, the 10-year US Treasury yields also dropped to near 4.56% from multi-year highs. Investors should be prepared for a volatile action in the US Dollar as the US inflation data will be published at 12:30 GMT. The Producer Price Index (PPI) report for September, released on Wednesday, remained hotter than anticipated due to higher gasoline and food prices while prices of core goods and services declined at factory gates.

About the US consumer inflation, investors have forecasted that headline and core inflation grew by 0.3% on a monthly basis in September. The annual core Consumer Price Index (CPI) is seen declining to 4.1% from the former reading of 4.3%. The US CPI report for September will shape the monetary policy decision for the November meeting.

On the Swiss Franc front, investors await Producer and Import Prices, which will be published on Friday. The economic data could provide fresh impetus to the inflation outlook in the nation.