USD/CHF aims to break above 0.8700 as Swiss Inflation softens further
|- USD/CHF sees more upside above 0.8700 as soft Swiss inflation boosts SNB dovish bets.
- Annual Swiss CPI grew at a softer pace of 0.6% against 0.8% in September.
- Investors await the US NFP data for fresh interest rate guidance.
The USD/CHF pair strives to break above the key resistance of 0.8700 in Friday’s European session. The pair strengthens as the Swiss Franc (CHF) weakens after the release of the Swiss Consumer Price Index (CPI) data, which showed that price pressures soften further in October.
Year-on-year Swiss CPI decelerated at a faster pace to 0.6% against the estimates and the prior release of 0.8%. On month, Swiss inflation deflated by 0.1%, slower than 0.3% in September but was expected to remain flat.
A sharp disinflation trend has prompted expectations of more interest rate cuts by the Swiss National Bank (SNB). The SNB has already reduced its key borrowing rates by 75 basis points (bps) to 1% this year, and a further slowdown in inflationary pressures points to the need for more cuts in the December meeting.
Meanwhile, the Swiss Franc pair is also performing better due to the upbeat US Dollar (USD). The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, bounces back above 104.00 ahead of the United States (US) Nonfarm Payrolls (NFP) data for October, which will be published at 12:30.
Investors will pay close attention to the US official employment data as the Federal Reserve (Fed) has been more worried about easing labor market conditions, with high confidence in the disinflation trend towards the bank’s target of 2%.
Economists expect the economy to have added 113K workers, which is less than half of the job additions at 254K recorded in September. The Unemployment Rate is expected to remain steady at 4.1%.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.