USD/CHF flat-lines around 0.9150, eyes on Swiss Retail Sales, US PCE data

The USD/CHF pair consolidates its losses around 0.9148 during the early Asian trading hours on Friday. The pair edges lower due to a correction of the US Dollar (USD) and lower US Treasury yields. Meanwhile, the US Dollar Index (DXY) hovers around 106.17 after retreating from 106.83, the highest since November.

On Thursday, the US real Gross Domestic Product (GDP) expanded at an annual rate of 2.1% in the second quarter (Q2), as expected. Meanwhile, the US Initial Jobless Claims for the week ending of September 22 climbed to 204K from 202K in the previous week, below the 215K anticipated. The pending home sales dropped 7.1% MoM in August, compared to expectations for a 1.0% drop MoM.

Chicago Federal Reserve (Fed) President Austan Goolsbee said on Thursday that the Fed will return inflation to target and has a chance to do something rare by accomplishing that without a recession. Richmond Fed President Thomas Barkin remarked that the past five months of inflation data have been upbeat but that it is too early to determine what monetary policy would be next. Barkin added that lost data due to the government shutdown would complicate understanding the economy. Investors will assess the narrative of a higher for longer rate in the US against the growth risks posed by the possibility of an imminent US government shutdown. This, in turn, might cap the upside of the Greenback and act as a headwind for the USD/CHF pair.

On the Swiss Franc front, data released on Thursday showed that the Swiss ZEW Survey Expectations came in at -27.6 in September from the previous reading of -38.6. Even though the Swiss National Bank (SNB) paused its rate-hiking cycle at the September meeting, markets anticipate the SNB to maintain a hawkish stance in its monetary policy to protect against a possible spike in imported inflation.

Looking ahead, market players will monitor the Swiss annual Retail Retail Sales for August. The attention will shift to the US Core Personal Consumption Expenditure (PCE) Price Index, the Fed's preferred measure of consumer inflation, which is expected to decline from 4.2% to 3.9%.