Swiss Franc Plummets to 16-Month Low as USD/CHF Cross Continues Winning Streak

The Swiss Franc has fallen to its lowest level in 16 months ahead of the release of the Consumer Price Index (CPI) data, which is expected later today. The CHF's decline was driven by a drop in investor sentiment, with the Swiss ZEW survey showing expectations fell to 2.6 in September, down from 12.1 previously.

Despite the decrease, analysts remain positive about the underlying condition of the Swiss economy, but concerns over inflation have heightened. The SNB maintained its policy rate at 0% and reaffirmed its readiness to intervene in forex markets as necessary to maintain price stability.

The USD/CHF cross has been on a winning streak for seven consecutive trading days, reaching a fresh high of 0.8367 during Asian hours on Thursday. However, upside momentum could remain limited due to the U.S. Dollar's struggle against easing Federal Reserve rate hike expectations following softer-than-expected inflation data.

Societe Generale's Jan Groen noted that while August US inflation appeared benign at first glance, the underlying picture was more troubling, with core PCE undershooting expectations but details showing renewed strength in services and super-core inflation pointing to still-firm underlying price pressures.