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Source: Newsmaker.id
The USD/CHF pair strengthened to around 0.8335 during the first half of European trading on Wednesday (Oct 14), following a correction in the US dollar from 18-month highs. The dollar's renewed strength was supported by growing expectations that the Federal Reserve would still raise interest rates in December, while geopolitical uncertainty boosted demand for the dollar as a safe-haven asset.
Market attention has now shifted to the US Producer Price Index (PPI) data due for release on Thursday. This data will provide further clues regarding inflationary pressures and the direction of Fed policy. If the PPI shows a stronger-than-expected rise, expectations for an interest rate hike could intensify, providing support for the dollar.
In addition to the PPI, the market is also awaiting a speech by Fed official Kevin Warsh on Friday. His remarks will be closely scrutinized for signals regarding the future direction of monetary policy. Interest rate expectations are a crucial factor for USD/CHF, as changes in US yields can influence the dollar's attractiveness relative to the Swiss franc.
Amid the wait for economic data, geopolitical risks remain a concern. Tensions in the Middle East and uncertainty surrounding the US-Iran conflict could boost demand for safe-haven assets. Such conditions might provide additional support for the dollar and limit USD/CHF's downside, even as corrective pressure persists.
Newsmaker Analysis: USD/CHF remains in a consolidation phase, but the short-term bias could turn positive again if US PPI data reinforces expectations of a December rate hike. Conversely, a weaker PPI and a more dovish tone from the Fed could weigh on the dollar. Geopolitical developments also bear watching, as they could drive safe-haven demand and increase volatility in USD/CHF movements.
Source: Newsmaker.id