- USD/CHF is trading flat around 0.8655 in the early European session on Thursday.
- US CPI inflation slowed to 2.9% in July, the smallest increase since March 2021.
- Rising geopolitical tensions in the Middle East could boost safe-haven flows, benefiting the CHF.
The USD/CHF pair is trading flat near 0.8655 during the early European session on Thursday. Traders might prefer to wait on the sidelines ahead of top-tier US economic data on Thursday. Meanwhile, the US Dollar Index (DXY), a measure of the US Dollar’s value relative to a basket of foreign currencies, is currently trading around 102.55, losing 0.05% on the day.
The US Consumer Price Index (CPI) inflation report indicated that price pressures are on track to return to the Federal Reserve’s (Fed) 2% target. However, expectations for a deeper rate cut by the Fed have diminished. According to the CME FedWatch tool, financial markets now price in a nearly 41% chance of a 50 basis point (bps) rate cut by the Fed in September, up from 50% before the release of the US CPI data.
Atlanta Fed President Raphael Bostic said Tuesday he wanted to see more evidence before supporting lower interest rates. Meanwhile, Chicago Fed President Austan Goolsbee signaled Wednesday that he is more concerned about the labor market than inflation given recent gains in price pressures and weak employment data.
Investors will be looking to the US Retail Sales and the weekly Initial Jobless Claims on Thursday for fresh impetus. Retail Sales are expected to rise 0.3% MoM in July, while Initial Jobless Claims for the week ending August 10 are estimated at 235K, compared to 233K the previous week. Additionally, Fed’s Alberto Musalem and Patrick Harker are scheduled to speak later in the day.
On the Swiss front, rising geopolitical tensions in the Middle East could boost the safe-haven currency like the Swiss Franc (CHF) and create a headwind for the USD/CHF. Local news agency Aljazeera reported that Israeli military aircraft attacked Hamad City while artillery shelled residential buildings in Khan Younis in the southern Gaza Strip after dozens of people were killed in attacks across the Palestinian territory on Wednesday. Developments around geopolitical risks will be in the focus of market players and could influence the pair for the time being.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
