- US CPI inflation came in higher than expected, knocking down rate-cut hopes.
- Swiss CPI inflation slumped, putting the CHF on the defensive.
- US Retail Sales still in the barrel for Thursday.
The USD/CHF tipped into a fresh eight-week high above 0.8700 after a hot US Consumer Price Index (CPI) print sent markets piling back into the safe haven US Dollar (USD), while the Swiss Franc (CHF) got pummeled after Swiss CPI inflation came in below expectations.
Swiss CPI inflation came in at 0.2% MoM in January, missing the forecast 0.6% and seeing only a thin rebound from the previous month’s 0.0% print. YoY Swiss CPI inflation printed at 1.3% versus the forecast steady print at 1.7%, sending the Swiss Franc lower and putting the USD/CHF on pace to close higher for the fifth of the last six trading weeks.
US CPI inflation came in hotter than markets anticipated, with MoM headline CPI printing at 0.3% in January versus the forecast 0.2%. December’s print saw a revision to 0.2% from 0.3%. Core annualized CPI held steady at 3.9% compared to the forecast 3.7%, and headline annualized US CPI printed at 3.1%, down from the previous 3.4% but missing the market’s forecast 2.9%.
With US inflation proving stickier than investors were hoping, market bets of a rate cut from the Federal Reserve (Fed) got pushe dout even further on Tuesday. According to the CME FedWatch Tool, money markets are now pricing in a first rate trim in June. Markets have been pushed down from six to five total rate cuts in 2024.
US Retail Sales are still slated for release on Thursday, alongside US Initial Jobless Claims. US Retail Sales are expected to tick down -0.1% in January versus the previous month’s 0.6%, and Initial Jobless Claims are expected to come in at 220K for the week ended February 9 compared to the previous week’s 218K.
USD/CHF technical outlook
Tuesday’s USD/CHF rally has the pair pulling even further away from near-term medians with the 200-hour Simple Moving Average (SMA) near 0.8710. The pair is testing into eight-week highs near the 0.8900 handle, and the USD/CHF climbed nearly 1.4% bottom-to-top on the day.
Daily candlesticks have pierced the 200-day SMA near 0.8843, and the pair has closed bullish for six of the last eight consecutive trading days. The USD/CHF has gained around 6.5% from December’s low of 0.8332.
USD/CHF hourly chart
USD/CHF daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds positive ground above 1.0700, eyes on German CPI data
EUR/USD trades on a stronger note around 1.0710 during the early Monday. The weaker US Dollar below the 106.00 mark provides some support to the major pair. All eyes will be on the Federal Reserve monetary policy meeting on Wednesday, with no change in rate expected.
USD/JPY recovers 156.00 after testing 155.50 on likely Japanese intervention
USD/JPY has recovered some ground above 156.00 after crashing to 155.00 on what seemed like a Japanese FX intervention. The Yen tumbled in early trades amid news that Japan's PM lost 3 key seats in the by-election. Holiday-thinned trading exaggerates the USD/JPY price action.
Gold tests critical daily support line, will it defend?
Gold price is seeing a negative start to a new week on Monday, having booked a weekly loss. Gold price bears the brunt of resurgent US Dollar (USD) demand and a risk-on market mood amid Japanese holiday-thinned market conditions.
XRP plunges to $0.50, wipes out recent gains as Ripple community debates ETHgate impact
Ripple loses all gains from the past seven days, trading at $0.50 early on Monday. XRP holders have their eyes peeled for the Securities and Exchange Commission filing of opposition brief to Ripple’s motion to strike expert testimony.
Week ahead: FOMC and jobs data in sight
May kicks off with the Federal Open Market Committee meeting and will be one to watch, scheduled to make the airwaves on Wednesday. It’s pretty much a sealed deal for a no-change decision at this week’s meeting.