USD/CHF follows the downward path near 0.9060, focus on US data

• USD/CHF retraces the recent gains ahead of the US Consumer Sentiment.
• A slew of hot US economic numbers could limit the US Dollar's weakening.
• Middle-East conflict could enhance the demand for the safe-haven Swiss Franc.

USD/CHF leans toward negative, turning downward post retracing recent gains. The spot price trades lower around 0.9060 during the early European session on Friday.

Despite the downward movement and reaching monthly lows on Thursday, the USD/CHF pair has experienced a rebound due to the optimistic economic data from the United States (US).

The US economic overview has been dynamic and reinforcing the strength of the US Dollar (USD), with the Consumer Price Index (CPI) exceeding expectations in September, showcasing a consistent annual expansion of 3.7%, slightly surpassing the estimated 3.6%.

The subtle uptick in Initial Jobless Claims for the week ending on October 6, marked by a modest increase of 209K, falling slightly below the forecasted 210K, indicates a nuanced trend suggesting a mild easing.

Thursday's data revealed a surge in the US Producer Price Index (PPI) in September on a yearly basis, rising from 2.0% to 2.2%. Additionally, the Core PPI climbed to 2.7%, surpassing the anticipated easing to 2.3%.

This upbeat US economic data has reignited the hawkish sentiment about the interest rates trajectory of the Federal Reserve (Fed), which could contribute support for the USD/CHF pair. The upbeat indicators have added complexity to the ongoing narrative, leading to speculation about how the Fed might respond.

The US Dollar Index (DXY) trades lower around 106.30 by the press time, retreating from the weekly low. The US Dollar (USD) weakens due to the downbeat US Treasury yields, with the 10-year US bond yield standing at 4.65%, down by 0.91% at the time of writing.

On the Swiss side, the Producer and Import Prices (YoY) reached to 1.0% decline in September from the previous decline of 0.8%. While the monthly data showed a decline of 0.1% against the 0.8% decline in August.

Additionally, the Swiss Franc appears to be garnering buying support amid the military conflict in the Middle East, as the currency is sought after as a safe haven during periods of geopolitical uncertainty.

Investors are expected to watch the US Michigan Consumer Sentiment Index scheduled for release on Friday. This index serves as a vital gauge of consumer confidence, offering insights into the broader economic sentiment. The ongoing analysis of these indicators will likely influence trading decisions in the USD/CHF pair.