- USD/CHF edges lower to 0.8830 on the weaker US Dollar on Monday.
- The US Manufacturing PMI dropped to 47.8 in February vs. 49.1 prior, below the market consensus.
- The signal of slowing inflation in Switzerland could open the door for earlier SNB rate cuts.
- Traders will focus on the Swiss CPI inflation data on Monday
The USD/CHF pair struggles to gain ground near 0.8830 after retreating from nearly the 0.8900 mark during the early European trading hours on Monday. The downtick of the pair is backed by the weaker US Dollar (USD) and lower US Treasury bond yields. Market players await the Swiss February Consumer Price Index (CPI) for fresh impetus, which is expected to ease from 1.3% in January to 1.1% in February.
The Institute for Supply Management (ISM) revealed on Friday that the US Manufacturing Purchasing Managers Index (PMI) declined to 47.8 in February from 49.1 in the previous month, weaker than the market expectation of 49.5.
Boston Federal Reserve (Fed) President Susan Collins and New York’s John Williams stated that the first rate cut will likely be appropriate later this year, while Atlanta’s Raphael Bostic said he expected the easing policy this summer if the economy evolves as he expects. Investors will take more cues from Fed's Chair Jerome Powell's testify on Wednesday, which might offer insight into the inflation outlook and monetary policy. The hawkish remarks from the Fed policymakers might lift the USD and act as a tailwind for the USD/CHF pair.
On the Swiss front, the annual inflation rate in Switzerland fell unexpectedly in January, which might convince the Swiss National Bank (SNB) to cut rates at its March meeting. The Swiss Federal Statistical Office will release the nation’s Consumer Price Index (CPI) for February later on Monday. These data could provide fresh catalysts for the USD/CHF pair.
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