The USD/CHF pair is on the rise as the Federal Reserve is expected to keep interest rates high for a longer period. Fed Vice Chair Philip Jefferson has emphasized the need to maintain higher rates until signs of inflation easing are evident. This has led to the US Dollar gaining ground against the Swiss Franc.
Traders are keeping an eye on the US Producer Price Index (PPI), which is a crucial economic indicator. The PPI report could have a significant impact on the US market and help traders predict the outcome of the Consumer Price Index (CPI). A positive PPI data release could further strengthen the US Dollar.
Meanwhile, in Switzerland, the SECO Consumer Climate (YoY) saw a slight decline in April, indicating a negative consumer sentiment. Producer and Import Prices data for April is set to be released, providing insights into consumer price inflation in Switzerland.
The Swiss Franc may face selling pressure as the Swiss National Bank (SNB) shifts its focus towards combating inflation rather than deliberately strengthening the currency. The SNB’s foreign exchange reserves have been increasing consecutively, reaching CHF 720 billion in April.