USD/CHF remains below 0.8900 following Swiss CPI data release

USD/CHF holds losses after the release of February’s Swiss Consumer Price Index on Wednesday.
The monthly CPI increased by 0.6% in February, surpassing market forecasts of a 0.5% rise.
The US Dollar faces challenges due to US economic growth concerns.

Akhtar Faruqui FXStreet

The USD/CHF pair continues its downward trend for the third consecutive session, trading around 0.8880 during European hours on Wednesday. The pair remains under pressure following the release of Swiss Consumer Price Index (CPI) data.

The monthly CPI rose by 0.6% in February, marking the first increase in nine months and the fastest pace since February 2021, exceeding market expectations of a 0.5% gain. The annual inflation rate eased slightly to 0.3% in February, surpassing the expected 0.2% increase but down from 0.4% in January, marking its lowest level since April 2021. Meanwhile, core inflation—which excludes volatile items such as unprocessed food and energy—remained steady at 0.9%, unchanged from January.

Additionally, the USD/CHF pair depreciates as the US Dollar (USD) struggles due to rising fears over slowing US economic growth. Investors now turn their focus to key US economic data, including the ISM Services PMI and ADP Employment Change, set for release in the North American session.

President Trump’s 25% tariffs on Canadian and Mexican goods took effect on Tuesday, alongside a hike in duties on Chinese imports to 20%. However, market sentiment weighs on the USD amid speculation that Trump could soften his stance on tariffs.

US Commerce Secretary Howard Lutnick suggested in a Fox News interview that Trump may reconsider the tariff policy less than 48 hours after its implementation, indicating potential relief if USMCA rules are followed. However, the New York Times reported that Trump has privately expressed his intent to keep the tariffs in place.

Economic Indicator

Consumer Price Index (MoM)

The Consumer Price Index (CPI), released by the Swiss Federal Statistical Office on a monthly basis, measures the change in prices of goods and services which are representative of the private households’ consumption in Switzerland. The CPI is the main indicator to measure inflation and changes in purchasing trends. The MoM figure compares the prices of goods in the reference month to the previous month. Generally, a high reading is seen as bullish for the Swiss Franc (CHF), while a low reading is seen as bearish.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

RBNZ set to pause interest-rate easing cycle as new Governor Breman faces firm inflation

The Reserve Bank of New Zealand remains on track to maintain the Official Cash Rate at 2.25% after concluding its first monetary policy meeting of this year on Wednesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.