USD/CHF trades lower near 0.8770 post recovering some intraday losses

USD/CHF touched a 13-week low at 0.8757 during the Asian session on Wednesday and recovered some of its intraday losses, trading near 0.8770 at the time of writing.

The decline in the USD/CHF pair is linked to the accommodative remarks made by US Federal Reserve (Fed) Governor Christopher Waller. Waller's suggestion that the Federal Reserve may not insist on maintaining high-interest rates if inflation consistently declines has likely played a role in the downward pressure on the US Dollar (USD) against the Swiss Franc (CHF).

It seems there's a difference of opinion within the Federal Reserve regarding the future trajectory of interest rates. While Fed Governor Christopher Waller suggested a more accommodative approach, Fed Governor Michelle Bowman expressed the possibility that the US Fed bank may need the policy rate at a higher level than pre-pandemic levels. Additionally, New York Fed President John Williams finds encouragement in the decline of inflation but reiterates the Fed's commitment to getting inflation back to target.

The US Dollar (USD) is undergoing a retreat against its major currency peers, with mixed results in US data contributing to the nuanced market sentiment. While the September US Housing Price Index (MoM) remained consistent at 0.6%, surpassing expectations, the CB Consumer Confidence Index increased to 102.0. However, the Richmond Fed Manufacturing Index printed a negative reading of 5, contrary to the expected positive figure.

Investors are now turning their attention to key events, including the preliminary Gross Domestic Product Annualized for the third quarter in the US and the release of the Fed's Beige Book, providing a comprehensive picture of overall US economic growth.

Looking ahead, the Swiss ZEW Survey – Expectations on Wednesday, Swiss Real Retail Sales for October on Thursday, and the Gross Domestic Product for the third quarter on Friday will be closely monitored. These releases hold significance in providing insights into economic conditions and shaping market expectations.