The Swiss Franc weakens against the USD as Middle East tensions and Fed rate expectations lift the Dollar before April CPI figures.
USD/CHF climbed 0.46% to 0.7815 on Tuesday, driven by renewed demand for the US Dollar amid escalating geopolitical tensions in the Middle East. Comments from US President Donald Trump suggesting the US-Iran ceasefire is fragile revived safe-haven flows, supporting the Greenback. The US Dollar Index (DXY) rose toward 98.30, further bolstered by expectations of prolonged Fed hawkishness.
Investors are focused on April’s US Consumer Price Index (CPI), with consensus forecasting annual inflation at 3.7%, up from 3.3% in March. Core inflation is expected to rise to 2.7% from 2.6%. Stronger-than-expected data could reinforce expectations of higher-for-longer interest rates, adding further support to the Dollar.
On the Swiss side, inflation rose for a second month to 0.6% in April, though it remains below the SNB’s 2% target. Core inflation slowed to 0.3%, contributing to the Franc’s underperformance as the SNB resists currency strength.