Swiss Franc Slumps to 16-Month Low Amid Weakening Investor Sentiment

The Swiss Franc (CHF) has reached its lowest level in 16 months ahead of the release of Consumer Price Index (CPI) data. The currency pair USD/CHF continues to climb, reaching a fresh high of 0.8367 during Asian hours on Thursday, as the CHF loses ground due to weakening investor sentiment.

The Swiss ZEW investor expectations survey dropped to 2.6 in September, down from 12.1 previously, reflecting growing concerns over domestic inflation trends. The SNB maintained its policy rate at 0% and reaffirmed its readiness to intervene in forex markets as necessary.

However, upside momentum for the USD/CHF cross could remain limited as the U.S. Dollar (USD) struggles against easing Federal Reserve rate hike expectations following softer-than-expected inflation data released on Wednesday. The CME FedWatch Tool shows that markets now price in roughly a 38% chance of a Fed rate hike in October, down from nearly 51% prior to the PCE release.