Fed rate rise bets may limit the USD/CHF decline.
As concerns about inflation increase due to increased oil costs, the US dollar may find support.
Higher energy prices caused Swiss inflation to double in August, but this increase is only predicted to last temporarily.
The USD/CHF pair lost ground for the third day in a row on Wednesday, trading at about 0.8090 at Asian time. Despite a hawkish tone about the Federal Reserve's (Fed) policy outlook, the pair is still muted as the US dollar (USD) maintains losses.
The CME FedWatch Tool indicates that traders are presently pricing in a 60% probability of an increase in interest rates at the next policy meeting of the US central bank. Later this week, the US Producer Price Index (PPI) and Consumer Price Index (CPI) inflation figures will be the main focus. Before the September meeting, these important readings might provide new insight into the Federal Reserve's next course of action.
Additionally, rising oil prices raise expectations for a Federal Reserve (Fed) rate hike and heighten concerns about inflation. Following a US raid on multiple Iranian vessels close to Kharg Island, a significant export center, crude oil prices have increased. Geopolitical tensions have increased as a result of these attacks, and market worries about possible interruptions to the world's oil supply have been heightened.
Due to ongoing tensions in the Middle East, which increased global oil prices and raised inflationary concerns, Swiss inflation doubled in August. This increase is anticipated to be short-lived, though, as electricity costs are expected to decline by roughly 4% the following year, which will probably have an impact on inflation in the coming months.
As consolidation continues, USD/CHF is seen to be limited to a familiar range.
UOB Group strategists continue to take a neutral medium-term position on USD/CHF, stating that they "continue to hold the same perspective as yesterday (07 Sep, spot at 0.8100)" for the next one to three weeks. With the pair "trading in a range between 0.8055 and 0.8155," UOB anticipates that the Dollar will continue to be directionless for the time being, highlighting a continuous consolidation phase rather than a clear trend move.
As concerns about inflation increase due to increased oil costs, the US dollar may find support.
Higher energy prices caused Swiss inflation to double in August, but this increase is only predicted to last temporarily.
The USD/CHF pair lost ground for the third day in a row on Wednesday, trading at about 0.8090 at Asian time. Despite a hawkish tone about the Federal Reserve's (Fed) policy outlook, the pair is still muted as the US dollar (USD) maintains losses.
The CME FedWatch Tool indicates that traders are presently pricing in a 60% probability of an increase in interest rates at the next policy meeting of the US central bank. Later this week, the US Producer Price Index (PPI) and Consumer Price Index (CPI) inflation figures will be the main focus. Before the September meeting, these important readings might provide new insight into the Federal Reserve's next course of action.
Additionally, rising oil prices raise expectations for a Federal Reserve (Fed) rate hike and heighten concerns about inflation. Following a US raid on multiple Iranian vessels close to Kharg Island, a significant export center, crude oil prices have increased. Geopolitical tensions have increased as a result of these attacks, and market worries about possible interruptions to the world's oil supply have been heightened.
Due to ongoing tensions in the Middle East, which increased global oil prices and raised inflationary concerns, Swiss inflation doubled in August. This increase is anticipated to be short-lived, though, as electricity costs are expected to decline by roughly 4% the following year, which will probably have an impact on inflation in the coming months.
As consolidation continues, USD/CHF is seen to be limited to a familiar range.
UOB Group strategists continue to take a neutral medium-term position on USD/CHF, stating that they "continue to hold the same perspective as yesterday (07 Sep, spot at 0.8100)" for the next one to three weeks. With the pair "trading in a range between 0.8055 and 0.8155," UOB anticipates that the Dollar will continue to be directionless for the time being, highlighting a continuous consolidation phase rather than a clear trend move.
