USD/CHF flat lines above mid-0.7900s, moves little after Swiss consumer inflation data

USD/CHF lacks any firm intraday directional bias on Thursday amid mixed fundamental cues.
The latest consumer inflation figures from Switzerland fail to provide any impetus to the CHF.
Fed rate cut bets keep the USD bulls on the defensive and contribute to capping spot prices.

Haresh Menghani FXStreet

The USD/CHF pair struggles to capitalize on the previous day's bounce from the 0.7930-0.7925 region, or a one-week low, and oscillates in a narrow trading band through the early European session on Thursday. Spot prices hold steady around the 0.7970 area and move little following the release of Swiss consumer inflation figures.

Switzerland’s statistics agency reported that the headline Consumer Price Index (CPI) declined by 0.2% in September, compared to a 0.1% fall recorded in the previous month. On a yearly basis, consumer prices were 0.2% higher during the reported month, matching August's final print and missing expectations for a 0.3% rise. The data, however, does little to provide any meaningful impetus to the Swiss Franc (CHF) or the USD/CHF pair amid mixed signals about the Swiss National Bank's (SNB) policy stance.

In fact, SNB President Martin Schlegel emphasised the central bank's willingness to cut interest rates further if necessary, though he also underscored the higher bar for a repeat of negative interest rates. Moreover, Schlegel had said that inflation is expected to rise slightly in the coming quarters, which could allow the SNB to leave rates unchanged. In contrast, dovish Federal Reserve (Fed) expectations keep the US Dollar (USD) bulls on the defensive and seem to act as a headwind for the USD/CHF pair.

Traders ramped up their bets that the US central bank will lower borrowing costs two more times by the year-end, following the disappointing release of the US private-sector employment details on Wednesday. Automatic Data Processing reported that private-sector employers shed 32K jobs in September, marking the biggest drop since March 2023. Adding to this, a partial US government shutdown contributes to the bearish sentiment surrounding the USD and caps the upside for the USD/CHF pair.

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.

AUD/USD finds some support near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies above mid-0.7100s during the Asian session on Friday, stalling the previous day's heavy losses to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the currency pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of consumer inflation figures before placing fresh bets.

USD/JPY holds steady around mid-154.00s; looks to US CPI for fresh impetus

USD/JPY preserves the previous day's recovery gains and consolidates around mid-154.00s during the Asian session on Friday as US Dollar bulls opt to wait for the release of the latest US consumer inflation figures. Meanwhile, the August US PPI report, released on Thursday, bolstered Fed rate-hike bets and acts as a tailwind for the buck. However, a more hawkish BoJ repricing might continue to underpin the Japanese Yen and cap the currency pair.

Gold hangs near one-week low, above $4,300 as focus shifts to US CPI

Gold languishes near its lowest level in over a week during the Asian session on Friday as rising Fed rate hike bets, bolstered by US PPI, underpin the US Dollar. Traders now look to the US CPI report for more cues about the Fed's policy path amid inflation risks stemming from higher energy prices due to the Middle East conflict. The outlook will drive the USD and influence the non-yielding bullion.

Ethereum holds above $2,400 as PPI data strengthens rate hike expectations

Ethereum (ETH) is down 0.7% on Thursday as the second-largest cryptocurrency looks to recover from earlier pressure following the release of stronger US inflation data. The Producer Price Index (PPI) for final demand rose 0.4% in August, matching market expectations after a revised 0.1% increase in July, according to the US Labor Department.

ECB recap: A hawkish hike despite downside growth risks

The European Central Bank (ECB) increased the Deposit Facility Rate to 2.50%, the Refinancing Rate to 2.65% and the Marginal Lending Facility to 2.90%, effective from September 16. The decision was accompanied by a clear warning that the outlook remains highly uncertain, with risks tilted to the upside for inflation and to the downside for growth.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.