USD/CHF Consolidates at 0.9040 Amid US Inflation Focus

By Usman Ahmed April 10, 2023, 9:22 am • Posted in Forex

In the early Tokyo session, the USD/CHF currency pair has been trading flat over 0.9036. While market participants wait for US Consumer Price Index (CPI) data on Wednesday, the Swiss Franc struggles to establish a trend.

Futures for the S&P 500 have stalled due to rising tensions between China and Taiwan. The market has been less nervous as a result of Chinese military exercises in Taiwan Island. Concerns about a recession could cause swings in US stock prices.

Jamie Dimon, CEO of JPMorgan Chase, recently warned CNN that the collapse of Silicon Valley Bank (SVB) and Signature Bank has raised the likelihood of a recession in the United States. While the banking sector is robust, he noted that the current state of the financial markets is “another weight on the scale” that points in the direction of a recession.

The US Dollar Index (DXY) is holding over 102.00 ahead of CPI data. Inflation as measured by the headline rate is expected to fall to 5.2% from 6.0% as a whole. The overall monthly inflation rate dropped from 0.4% to 0.3%. Since oil prices dropped in March, inflationary pressures should increase.
Core CPI, which excludes volatile commodities like oil and food, is expected to increase to 5.6% from 5.5%. Core goods demand is being maintained under rising inflationary pressures due to a rising labour cost index. If this trend persists through May, the Fed may decide to increase interest rates once more.