Swiss Franc drops to fresh 16-month lows as CPI data supports SNB’s dovishness

USD/CHF rallies to fresh 16-month highs above 0.8380, poised to complete a six-week rally.
Swiss inflation remains at moderate levels, which allows the SNB to keep low interest rates for a longer time.
The US Dollar remains buoyed across the board as US yields hit fresh multi-decade highs.

Guillermo Alcala FXStreet

The Swiss Franc (CHF) extends losses against a firm US Dollar (USD) on Thursday, as Swiss inflation data allows the Swiss National Bank (SNB) to keep interest rates lower for longer, while the Greenback remains buoyed by higher US Treasury yields. The USD/CHF pair hit a fresh 16-month high above 0.8380 and is on track to complete a six-week rally.

Swiss Consumer Price Index (CPI) data released on Thursday revealed that inflation accelerated to a 1% year-over-year (Y-o-Y) pace in September from 0.8% in August, although the monthly CPI eased to 0%, following 0.4% growth in the previous month. All in all, data in line with market expectations and nowhere close to pressuring the SNB to alter its accommodative monetary policy.

Retail Sales, on the other hand, accelerated to a 3.2% Y-o-Y pace in August, from 2.6% in July, against market expectations of a moderate slowdown to 2.2%. These figures, however, failed to offset the negative impact of the soft inflation data.

US Treasury yields underpin demand for the US Dollar

The US Dollar remains bid against its main peers, fuelled by long-term US Treasury yields, as the uncertainty in the Middle East conflict, which enters its seventh month this week, keeps boosting energy prices. The yield for the US 10-year note reached levels above 5.30% on Wednesday, and the 30-year yield hit 5.65, both at 24-year highs,

US inflation data, on the other hand, cooled market expectations of another Federal Reserve (Fed) rate hike in October, although it failed to dent the US Dollar’s strength. Figures released by the US Bureau of Economic Analysis (BEA) showed that the Personal Consumption Expenditures (PCE) Price Index grew less than expected in August, while July’s reading was revised lower.

Societe Generale’s Jan Groen argues that while recent inflation revisions were "modestly favorable (...) underlying inflation remains too elevated to provide the Fed with clear comfort.” Against this backdrop, Groen judges that “a pause in October remains possible, but an October hike remains on the table pending September CPI and PPI data.”

Economic Indicator

Consumer Price Index (MoM)

The Consumer Price Index (CPI), released by the Swiss Federal Statistical Office on a monthly basis, measures the change in prices of goods and services which are representative of the private households’ consumption in Switzerland. The CPI is the main indicator to measure inflation and changes in purchasing trends. The MoM figure compares the prices of goods in the reference month to the previous month. Generally, a high reading is seen as bullish for the Swiss Franc (CHF), while a low reading is seen as bearish.

Economic Indicator

Real Retail Sales (YoY)

The Retail Sales data, released by the Swiss Federal Statistical Office on a monthly basis, measures the volume of goods sold by retailers in Switzerland. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the YoY reading comparing sales volumes in the reference month with the same month a year earlier. Generally, a high reading is seen as bullish for the Swiss Franc (CHF), while a low reading is seen as bearish.

AUD/USD keeps range near 0.6950 after Australian trade data

AUD/USD consolidates near a two-month low, trading around mid-0.6900s in the Asian session on Thursday amid a bullish US Dollar. The US PCE data tempered October Fed hike bets, though oil-driven inflation fears remain supportive of elevated US bond yields. Meanwhile, Australia's trade surplus shrank sharply in August to AUD495M, having limited impact on the Aussie Dollar and the pair.

USD/JPY sits at weekly top above 158.00 as bullish USD counters intervention risks

USD/JPY is sitting at the top end of its weekly range above 158.00 in the Asian session on Thursday. Despite the softer US PCE data, oil-driven inflation risks keep US bond yields elevated near multi-year highs. Moreover, the US-Iran standoff benefits the safe-haven US Dollar and supports the pair. Broad US Dollar strength counters hawkish BoJ expectations and Japanese intervention risks.

Gold sticks to modest gains; remains below $4,200 as bullish USD limits upside

Gold attracts some dip-buyers near the $4,139 region during the Asian session, stalling the previous day's pullback from the $4,220 area, touched in reaction to softer-than-expected US inflation data. However, elevated US bond yields remain supportive of the prevailing strong bullish sentiment surrounding the US Dollar and should keep a lid on any meaningful appreciation for the non-yielding yellow metal.

Hyperliquid pares gains as ETF outflows cap tentative bullish recovery

Hyperliquid (HYPE) is down 2% at press time on Thursday, trimming its 5% gains from the previous day. Institutional demand is easing, with $5 million in outflows on Wednesday, weighing on near-term investors' sentiment. The technical outlook for HYPE indicates a near-term mixed tone as the price remains capped below $90.

The Euro is near a one-year low: Inflation could trigger its rebound, not its fall

EUR/USD has fallen to its lowest level since May 2025, but a fresh inflation shock in the Eurozone could give the Euro an unexpected lifeline. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082. The decline reflects a powerful combination of US Dollar strength, geopolitical uncertainty and renewed concerns about Europe's exposure to higher energy prices.

The Euro is near a one-year low: Inflation could trigger its rebound, not its fall

EUR/USD has fallen to its lowest level since May 2025, but a fresh inflation shock in the Eurozone could give the Euro (EUR) an unexpected lifeline. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082.