Swiss Franc Edges Up Despite Tepid Economic Expectations Data
The Swiss Franc (CHF) is experiencing a moderate recovery on Wednesday, as the US Dollar (USD) trims gains amid a slight pullback in US Treasury yields and dovish Fedspeak. The USD/CHF pair has retreated to the 0.8330 area during the European session but remains close to the 16-month highs above 0.8350 hit on Tuesday following a lukewarm ZEW Economic Sentiment Report.
The ZEW Survey Expectations data released by the Centre for European Economic Research revealed that economic expectations in Switzerland deteriorated in September, with its monthly sentiment index falling to 2.6 from 12.1 in August. However, this has failed to impact the Swissie, which continues to edge higher against the US Dollar.
The US Dollar's pullback is attributed to lower yields and dovish comments by Fed officials. The return of the benchmark 10-year note retreated by 8 basis points in one day but remains above the key 5% level. Additionally, New York Federal Reserve President John Williams' comments that 'there is no rush after September's rate hike' have cooled hopes of back-to-back rate hikes.
The market is bracing for steady headline inflation at a 3.6% yearly rate and a similarly steady core reading, showing a 3.3% year-on-year growth in the US Personal Consumption Expenditures (PCE) Price Index, due later in the day.