Usdchf Positive Before Us Cpi

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Usdchf Positive Before Us Cpi

Usd/Chf Positive Above 0.9850, Us Cpi Eyed

The USD/CHF pair is trading in the green for the 2nd day in a row and is exchanging hands at 0.8980 on Tuesday. Meanwhile, the DXY is in the consolidation phase near the 105.00 handle as the market players await the US CPI release, which is due on Thursday.

Before the release of the US CPI, another important event was the speech of the Fed Chair, who will give testimony today. He is expected to deliver a semi-annual monetary policy that will provide key insights into the Fed's thinking and next plan of action.

Us Cpi Forecast Shows 3.34% Y/Y Reading

The market is full of rumors and even expectations that the US Fed will start cutting rates from September 2024. This fundamental shift in thinking has come after the release of softer NFP data which showed a higher jobless rate.

However, if Powell's speech hints at a hawkish stance, it will be a breath of fresh air for the US Dollar. On the other hand, any dovish comment will mean the current trend of USD will continue.

The US CPI release carries a lot more importance than Powell's testimony as even the US Federal Reserve prefers hard data rather than speculation. The US CPI is expected to be around 3.1 y/y in June against a reading of 3.3% y/y in May.

The US core CPI will likely remain near 3.34% y/y with no change at all during June. If the actual CPI print shows an even lower reading than the forecasts, it will basically confirm the September rate cut. On the other hand, a higher CPI reading will further delay the rate cuts to the end of 2024.

On the Switzerland front, the political uncertainty from France and even around the globe is boosting the appeal of holding CHF against the USD. However, the only problem is the SNB is highly likely to cut rates as inflation has slowed down recently.

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