USD/CHF consolidates around 0.7960 ahead of Swiss inflation data

USD/CHF trades sideways around 0.7960 as investors await the Swiss inflation data for September.
SNB’s Schlegel expresses confidence that economic growth and inflation conditions could improve in the near term.
Slowing US job demand has boosted Fed dovish bets.

Sagar Dua FXStreet

The USD/CHF pair trades in a tight range around 0.7960 during the Asian trading session on Thursday. The Swiss Franc pair consolidates as investors await the Swiss Consumer Price Index (CPI) data for September, which will be published at 06:30 GMT.

Economists expect the Swiss inflation to have grown at an annual pace of 0.3%, faster than 0.2% in August. On a monthly basis, price pressures are expected to have deflated at a faster pace of 0.2% against the prior reading of 0.1%.

Investors will pay close attention to the Swiss inflation data as the Swiss National Bank (SNB) Chairman Martin Schlegel said earlier this week that price pressures could “accelerate” in the coming quarters. Schlegel added that economic Indicators suggest a “stable situation and moderate growth” in the near term.

The optimism from SNB’s Schlegel on inflation and economic growth came at a time when the United States (US) had imposed 100% tariffs on imports of pharmaceuticals. Given that the Swiss economy is the second-largest exporter of pharmaceutical and healthcare products to the US, the scenario is unfavourable for the Swiss pharma industry.

Signs of Swiss inflation accelerating would diminish fears that the SNB could push interest rates into a negative territory. On the contrary, soft numbers would boost them.

In the United States (US), the shutdown of the government has raised concerns over the domestic economic outlook. The US Growth Domestic Product (GDP) could decline by $15 billion each week on Washington’s closure, according to a White House memo.

The US government closure has been keeping the US Dollar (USD) on its back foot. At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, struggles to gain ground after posting a fresh weekly low near 97.45 on Wednesday.

Meanwhile, firm Federal Reserve (Fed) dovish bets due to the weakening job market have also weighed on the US Dollar. The ADP Employment Change data showed on Wednesday that 32K employees were laid off by the US private sector in September. Additionally, the revision of August employment data also showed that 3K workers were fired against the hiring of 54K fresh workers.

Economic Indicator

Consumer Price Index (YoY)

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 YoY reading compares prices in the reference month to 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.

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