USD/CHF seems baffled around 0.8750, investors await US CPI for fresh guidance
- USD/CHF turns topsy-turvy around 0.8750 ahead of US inflation data.
- US equities witnessed buying interest after Fed Goolsbee said Fitch’s downgrade to the US debt won’t make any difference.
- A tight labor market in the Swiss economy could keep inflation higher than the desired rate.
The USD/CHF pair turns directionless around 0.8750 in the European session, following the footprints of the US Dollar Index (DXY). The Swiss Franc asset struggles for a decisive move as investors are sidelined ahead of the United States Consumer Price Index (CPI) data, which will be published on Thursday at 12:30 GMT.
S&P500 futures generate losses in London amid cautious market mood. US equities witnessed buying interest on Monday after Chicago Federal Reserve (Fed) President Austan D. Goolsbee said Fitch’s downgrade to the US government's long-term debt rating won’t make any difference.
The US Dollar Index (DXY) struggles to climb above the immediate resistance of 102.40 as investors need fresh cues about September’s monetary policy from the Fed. This week, investors will keep an eye on the US inflation data.
As per the estimates, headline and core CPI maintained a pace of 0.2% in July. On an annualized basis, headline CPI rebounded to 3.3% vs. June’s print of 3.0%. Contrary, core inflation that excludes volatile food and oil prices decelerated marginally to 4.7% against a prior reading of 4.8%. A rebound in inflationary pressures would force the Fed to discuss more interest rate hikes. Apart from the consumer inflation data, Friday’s Producer Price Index (PPI) will also remain in focus.
In the Swiss economy, a tight labor market could keep inflation higher than the desired rate. The Unemployment Rate for July remained near historic lows at 1.9%. This would force the Swiss National Bank (SNB) to lift interest rates further.