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Source: Newsmaker.id
The USD/CHF pair weakened during Tuesday's trading (Oct 13), hovering around 0.8330, following a slight gain in the previous session. This decline occurred as the US dollar retreated from an 18-month high. The US Dollar Index (DXY) fell to around 102.40 after previously touching 102.61, while investors shifted their focus to US inflation data that could determine the Federal Reserve's policy direction.
Markets are now awaiting the release of the Consumer Price Index (CPI) on Wednesday and the Producer Price Index (PPI) on Thursday to gain a clearer picture of inflationary pressures and the Fed's interest rate path. According to the CME FedWatch tool, the market sees an approximately 80% probability that the Fed will hold interest rates steady at the upcoming meeting, while the likelihood of a rate hike in December stands at around 88%. This divergence in expectations makes inflation data increasingly critical for the dollar's movements.
Despite the dollar's correction, geopolitical risks could still trigger demand for safe-haven currencies. A deadly attack on King Khalid International Airport in Riyadh has reignited tensions between Saudi Arabia and the Iran-backed Houthi group. Threats to Saudi airspace and airports could heighten regional instability and drive investors back toward assets considered safer, including the US dollar and the Swiss franc.
On the Swiss side, pressure on the franc remains influenced by monetary policy divergences with other major central banks. The Swiss National Bank (SNB) maintained interest rates at 0% in September and retained a dovish stance, as Swiss inflation is considered low and stable. These conditions place the franc under relative pressure, potentially providing support for the USD/CHF pair should the dollar regain momentum. (asd)
Source: Newsmaker.id