USD/CHF aims to break above 0.8700 as Swiss Inflation softens further

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  • 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.




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