USD/CHF Pair Trades Sideways Amid Yen Strength and Fed Expectations
The USD/CHF pair has been trading with a downside bias on Monday as the US Dollar remains on the defensive. This is largely due to the strength of the Japanese Yen, which is pushing down the dollar. At the current time, the pair is trading around 0.8091 after retreating from an intraday high of 0.8110.
The USD/JPY has fallen to a six-and-a-half-month low near 154.40, while the US Dollar Index (DXY) hovers near a two-week low around 98.90. This is happening despite escalating tensions in the Middle East, which are adding to inflation concerns through higher Oil prices.
The US Producer Price Index (PPI) and Consumer Price Index (CPI) data due later this week will be closely watched ahead of the Federal Reserve's September 15-16 policy meeting. However, the Swiss Franc is struggling to capitalise on US Dollar weakness, despite expectations of further monetary policy tightening by the Bank of Japan.
The Swiss National Bank's readiness to intervene in the foreign exchange market to curb any sharp appreciation of the Franc also limits demand for the currency. On the technical front, the USD/CHF holds near the 50-day Simple Moving Average (SMA) around 0.8091, keeping the near-term outlook neutral.