The Swiss Franc (CHF) saw its recent recovery stall during a quiet market session on Tuesday, despite broad-based weakness in the US Dollar (USD) driven by a pullback in US Treasury yields and a mild reversal in Oil prices. The USD/CHF pair remained above 0.8325, maintaining the broader bullish structure for the US Dollar against the Swiss Franc [1]. Brent Oil prices retreated to $103.00 per barrel, about $2.5 below Monday’s highs, but remained above the critical $100 level, which continues to keep global risk appetite subdued [1].
Cleveland Federal Reserve President Beth Hammack reiterated her hawkish stance, emphasizing the need for further monetary tightening due to persistent inflation, stating that the Fed has missed its 2% inflation target for five and a half years. However, her comments did not provide additional support for the US Dollar, as markets are now focused on upcoming US Consumer Price Index (CPI) and Producer Price Index (PPI) data releases later in the week to better gauge the Federal Reserve’s tightening path [1]. According to the FedWatch Tool, investors are pricing in an 80% probability that the US central bank will keep rates unchanged at its October 28 and 29 meeting, but there remains confidence in a rate hike in December, pending confirmation from September’s inflation data [1].
In Switzerland, the economic calendar is light this week, and the ongoing monetary policy divergence between the Federal Reserve and the Swiss National Bank (SNB) is expected to keep the CHF on the defensive. The SNB’s benchmark interest rate remains at 0% and is not anticipated to change in the near term, as inflation in Switzerland continues at moderate levels [1]. Strategists at UOB Group maintain a steady medium-term outlook for USD/CHF, suggesting the pair has likely entered a range-trading phase between 0.8245 and 0.8365 [1].
CONCLUSION
The Swiss Franc's recovery has lost momentum as the US Dollar remains resilient above key technical levels, despite softer Treasury yields and oil prices. With the SNB expected to keep rates steady and the market awaiting key US inflation data, the USD/CHF is likely to remain range-bound in the near term. Market participants are closely watching for September inflation figures to clarify the Federal Reserve’s next moves.