CFD Trading Rate US Dollar vs Swiss Franc (USDCHF)

• USD/CHF attempts to break above the 14-day EMA at the 0.8832 level.
• The daily chart analysis indicates a sustained bullish bias, with the pair trending higher within an ascending channel pattern.
• The pair may navigate the support region around the ascending channel’s lower boundary at 0.8750 level.

The USD/CHF pair retraces recent losses from the previous session, trading around 0.8830 during the Asian hours on Thursday. An analysis of the daily chart suggests an ongoing bullish bias as the pair moves upwards within the ascending channel pattern.

The 14-day Relative Strength Index (RSI) is slightly above 50 level, indicating a bullish market trend. Additionally, the nine-day Exponential Moving Average (EMA) remains above the 14-day EMA, suggesting a bullish bias in the short-term price movement.

On the upside, the USD/CHF pair tests the immediate 14-day EMA at 0.8832 level, followed by the nine-day EMA at 0.8847 level. A successful breach above these levels could further strengthen the bullish bias and support the pair to approach the upper boundary of the ascending channel at a psychological level of 0.8900.

In terms of support, the USD/CHF pair may navigate the region around the lower boundary of the ascending channel at the 0.8750 level. A decisive break below the channel may cause the emergence of the bearish bias and put downward pressure on the pair to approach its six-week low of 0.8606.

USD/CHF: Daily Chart

• USD/CHF weaken to around 0.8855 in Wednesday’s early European session. 
• Fed officials see interest rate cuts ahead, but only gradually, FOMC Minutes showed. 
• The rising Middle East geopolitical tensions could boost the safe-haven currency like the Swiss Franc.

The USD/CHF pair softens to near 0.8855 during the early European session on Wednesday. The weakening of the US Dollar (USD) ahead of the US October inflation data weighs on the pair. Meanwhile, the US Dollar Index (DXY), which measures the value of the USD against a basket of currencies, edges lower to near the weekly low as profit-taking set in.

Traders prefer to wait on the sidelines ahead of US PCE data, which is due later on Wednesday. The US markets will be closed for the Thanksgiving holiday on Thursday. However, the strong US economic data and the cautious stance of the US Federal Reserve (Fed) are likely to cap the upside for the USD in the near term. The Federal Open Market Committee (FOMC) Minutes from the November meeting released Tuesday showed that Fed officials see interest rate cuts ahead but at a gradual pace. 

Traders pared back their expectations for an interest rate cut in December. Futures traders are now pricing in a 57.7% possibility that the Fed will cut rates by a quarter point, down from around 69.5% a month ago, according to the CME FedWatch Tool. 

On Tuesday, Israel approved a ceasefire agreement with Lebanon’s Hezbollah militants that would end nearly 14 months of fighting linked to the war in the Gaza Strip, per the AP News. US President Joe Biden said the deal between Israel and Hezbollah involves Israeli forces withdrawing from Lebanon over 60 days, with Lebanon’s military taking control of areas in the country's south to ensure Hezbollah does not rebuild forces. 

Investors will closely monitor the development surrounding the geopolitical risks. Any signs of the escalating tension could boost the safe-haven flows, benefiting the Swiss Franc (CHF). 

• USD/CHF drifts higher to near 0.8875 in Tuesday’s early European session. 
• Trump’s fresh tariff threats provide some support to the USD. 
• Geopolitical risks might boost the Swiss Franc and cap the pair’s upside. 

The USD/CHF pair holds positive ground around 0.8875 during the early European session on Tuesday. The US Dollar (USD) gains traction broadly after US President-elect Donald Trump on Monday vowed tariffs on Mexico and Canada and extra tariffs on China. 

Trump said that he would sign an executive order imposing a 25% tariff on all products coming into the United States from Mexico and Canada and additional tariffs on China. This, in turn, lifts the Greenback against its rivals. 

Furthermore, economists expect just two rather than four rate reductions next year, and the Federal Reserve (Fed) will likely cut its key rate when it meets in the December meeting. Financial markets are now pricing in a nearly 55.9% possibility that the Fed will cut rates by a quarter point, down from around 69.5% a month ago, according to the CME FedWatch Tool. Traders await the Federal Open Market Committee (FOMC) Minutes for fresh impetus. The less dovish remarks from the Fed officials might further support the Greenback in the near term.

On the other hand, the escalating geopolitical tension between Russia and Ukraine could boost the safe-haven flows, benefiting the Swiss Franc (CHF). Sky News reported on Tuesday that Russian forces are advancing at the fastest rate since the early months of the war, according to analysts at the Institute for the Study of War (ISW). 

• USD/CHF is correcting back within an established uptrend. 
• This is likely just a correction of the dominant trend with a resumption higher to follow. 

USD/CHF is pulling back within an established short and medium-term uptrend. At the moment the pullback looks corrective in nature and this suggests bulls will eventually push price higher again. Given the technical analysis theory that “the trend is your friend” the odds favor a continuation higher to the next set of targets.

USD/CHF Daily Chart 

USD/CHF may find support at the 0.8873 support level (green dashed line) or the (green) 200-day Simple Moving Average (SMA) at 0.8822. 

A break above the 0.8958 November 22 high would probably confirm a continuation up to the next target at 0.9000 (round number and psychological area), followed by 0.9050 (July 2 swing high). 

The (blue) Moving Average Convergence Divergence (MACD) line is above the zero line and the red signal line, reinforcing the bullish bias. 

• USD/CHF faces challenges as the US Dollar corrects downwards amid bond market optimism.
• The robust preliminary S&P Global US PMI data have weakened the likelihood of the Fed’s aggressive rate cuts.
• Traders await the Swiss Employment Level QoQ for the third quarter due on Monday.

USD/CHF corrects downwards after hitting its four-month high of 0.8957 in the previous session, currently trading around 0.8910 during the Asian session on Monday. The US Dollar (USD) receives downward pressure due to bond market optimism following President-elect Donald Trump's selection of fund manager Scott Bessent as the US Treasury secretary, a seasoned Wall Street figure and fiscal conservative.

Meanwhile, the US Dollar Index (DXY), which tracks the US Dollar's performance against six major currencies, has eased to around 107.00 after hitting a two-year high of 108.07 on Friday. However, downside risks for the USD remain limited, as the robust preliminary S&P Global US Purchasing Managers’ Index (PMI) data have strengthened expectations that the Federal Reserve (Fed) may slow the pace of rate cuts.

Futures traders are now assigning a 50.9% probability to the Federal Reserve cutting rates by a quarter point, down from approximately 61.9% a week earlier, according to the CME FedWatch Tool. Meanwhile, Treasury yields remain buoyed by expectations that President-elect Donald Trump’s proposed policies on tariffs, immigration, and taxes could spur inflation and constrain the Fed’s capacity to reduce borrowing costs further.

The Swiss Franc (CHF) has encountered difficulties as the recent decline in inflation has led to market expectations of further interest rate cuts by the Swiss National Bank (SNB) later this year and into 2025 to counter deflationary pressures. Switzerland's annual inflation rate dropped for the third consecutive month to 0.6% in October, marking the lowest level since June 2021.

SNB Chairman Martin Schlegel reaffirmed that the central bank will continue to focus on keeping inflation low as a key pillar of its monetary policy. Schlegel stressed that maintaining inflation within the 0-2% range has been vital for the Swiss economy's strong performance in recent years.

• USD/CHF is resuming its dominant uptrend after a short correction. 
• The short and medium-term trends are bullish indicating odds favor a continuation higher. 

USD/CHF is striking higher again after a brief pullback from overbought levels. It is surging on Friday as it thrusts up towards the next key targets at 0.9000 – a whole-number psychological level – and 0.9050, the July 30 swing high. 

USD/CHF Daily Chart 

USD/CHF is in an established short-term uptrend which means the odds favor more upside. This is due to the theory in technical analysis that “the trend is your friend” which advocates trading in the direction of the dominant trend. 

The Relative Strength Index (RSI) has almost reached above 70 again, suggesting price is close to levels where it would be considered overbought. If the RSI closes above 70 traders are advised not to add to their long positions for risk of the price pulling back.  

• USD/CHF softens to near 0.8860 in Friday’s early European session. 
• The escalation in the Russia-Ukraine war might support the Swiss Franc.
• Bets for a less dovish Fed might help limit the USD’s losses. 

The USD/CHF pair trades with mild losses around 0.8860 during the early European session on Friday. The fears of a potential escalation in the Russia-Ukraine conflict boost the safe-haven flows, benefiting the Swiss Franc (CHF) against the Greenback. Traders await the flash US S&P Global Purchasing Managers Index (PMI) data and the final Michigan Consumer Sentiment on Friday for fresh impetus. 

Russian President Vladimir Putin said on Thursday that Russia carried out a strike with a “ballistic missile with a non-nuclear hypersonic warhead” with a medium range on the Ukrainian city of Dnipro, per CNN. Putin also warned the West that Moscow could attack any country's military facilities that utilised weapons against Russia. The development surrounding the Russia-Ukraine war will be closely watched, and any signs of rising geopolitical risks could lift the safe-haven currency like the CHF in the near term. 

On the other hand, the rising expectation of less aggressive monetary policy easing by the US Federal Reserve (Fed) might support the US Dollar (USD). On Thursday, Chicago Fed President Austan Goolsbee reiterated his support for another interest rate cut and his openness to doing them more slowly. Goolsbee added that inflation over the last year and a half has eased and is on its way to the Fed's 2% target. 

• USD/CHF trades in a tight range below 0.8850 as investors seek fresh Fed interest rate cues.
• Donald Trump’s economic agenda will be inflationary for the US economy.
• Investors await flash US S&P Global PMI for November and SNB Schlegel’s speech, which are scheduled for Friday.

The USD/CHF pair consolidates in a tight range below 0.8850 in European trading hours on Thursday. The Swiss Franc pair trades sideways as investors look for fresh cues about whether the Federal Reserve (Fed) will cut interest rates again in the monetary policy meeting in December. Meanwhile, the US Dollar (USD) holds its Wednesday’s recovery and aims to break above the fresh yearly high.

Traders doubt Fed rate cuts next month as market experts believe that price pressures in the United States (US) region could rebound amid expectations that President-elect Donald Trump will raise import tariffs and lower taxes, a move that will boost employment, economic growth, and consumer spending.

According to the CME FedWatch tool, the likelihood of the Fed cutting interest rates by 25 basis points (bps) to 4.25%-4.50% has diminished to 59% from 72% a week ago.

Going forward, investors will focus on the flash S&P Global PMI data for November, which will be released on Friday. The preliminary PMI data will help investors to project the next move in the US Dollar.

On the Swiss Franc (CHF) front, investors await Swiss National Bank (SNB) Vice Chairman Martin Schlegel’s speech, which is scheduled for Friday. In his last speech at an event organized by Raiffeisen Bank in Cham, Switzerland, on October 29, Schlegel emphasized the need for interest rate reductions to maintain price stability.

USD/CHF bounces back after a mild correction to a 50% Fibonacci retracement around 0.8800. The Fibo tool is plotted from a May high of 0.9225 to a September low of 0.8375. Upward-sloping 20-day Exponential Moving Average (EMA) near 0.8770 suggests that the near-term trend is bullish.

The 14-day Relative Strength Index (RSI) oscillates in the 60.00-80.00 range, indicating a strong bullish momentum.

The asset could rise to near the July 5 low of 0.8950 and the psychological resistance of 0.9000 after breaking above the November 14 high of 0.8918.

In an alternate scenario, a downside move below 38.2% Fibo retracement at 0.8700 could drag the asset towards the October 23 low of 0.8650, followed by the November low of 0.8616.

USD/CHF daily chart

• USD/CHF meets with a fresh supply on Thursday, though the downside seems limited.
• Expectations for a less dovish Fed and elevated US bond yields could support the USD.
• The risk-on mood could undermine the safe-haven CHF and lend support to the major.

The USD/CHF pair struggles to capitalize on the previous day's recovery from the vicinity of the 0.8800 mark or a one-week low and attracts fresh sellers during the Asian session on Thursday. Spot prices currently trade around the 0.8825 region, down just over 0.2% for the day, though any meaningful downside seems elusive in the wake of a bullish US Dollar (USD) sentiment. 

Investors now seem convinced that US President-elect Donald Trump's expansionary policies will likely boost inflation and limit the scope for the Federal Reserve (Fed) to ease its monetary policy aggressively. Moreover, Fed policymakers' recent cautious remarks on further policy easing remain supportive of rising US Treasury bond yields. This, in turn, assists the USD Index (DXY), which tracks the Greenback against a basket of currencies, to hold steady near the year-to-date touched last week and should act as a tailwind for the USD/CHF pair. 

Meanwhile, the initial market reaction to Russian President Vladimir Putin's approval to change the country's nuclear doctrine turned out to be short-lived as comments from Russian and US officials eased concerns about the onset of a nuclear war. This remains supportive of a generally positive tone across the global equity markets and undermines demand for the safe-haven Swiss Franc (CHF). The prevalent risk-on mood might further contribute to limiting the downside for the USD/CHF pair and warrants some caution for aggressive bearish traders.

Market participants now look forward to the US economic docket – featuring the release of the usual Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index and Existing Home Sales data. This, along with the speeches from a slew of influential FOMC members, will drive the US bond yields and the USD. Apart from this, geopolitical developments should produce short-term trading opportunities around the USD/CHF pair. Nevertheless, the fundamental backdrop suggests that the path of least resistance for spot prices is to the upside.

• USD/CHF recovers further above 0.8850 as the US Dollar bounces back strongly.
• Traders doubt whether the Fed will cut interest rates in December.
• USD/CHF finds a cushion near the 50% Fibo retracement around 0.8800.

The USD/CHF pair extends its recovery above 0.8850 in the North American trading session on Wednesday. The Swiss Franc pair rises as the US Dollar (USD) bounces back strongly amid doubts about whether the Federal Reserve (Fed) will continue its policy-easing cycle in the December meeting.

According to the CME FedWatch tool, trades see a 59% chance that there will be 25 basis points (bps) interest rate cut next month, which will push interest rates lower to 4.25%-4.50%. The probability of a Fed rate cut has diminished from 82.5% a week ago as investors expect President-elect Donald Trump’s economic agenda will boost inflation in the United States (US) along with its economic growth.

Meanwhile, global brokerage firm Nomura expects the Fed to pause the policy-easing cycle in December. "We currently expect tariffs will drive realized inflation higher by the summer, and risks are skewed towards an earlier and more prolonged pause,” analysts at Nomura said.

The Swiss Franc (CHF) witnessed buying interest on Tuesday as a fresh escalation in the Russia-Ukraine war improved its safe-haven bid. However, it turned out short-lived as Russian Foreign Minister Sergei Lavrov pushed back expectations of a nuclear attack.

USD/CHF bounces back after a mild correction to a 50% Fibonacci retracement around 0.8800. The Fibo tool is plotted from a May high of 0.9225 to a September low of 0.8375. Upward-sloping 20-day Exponential Moving Average (EMA) near 0.8765 suggests that the near-term trend is bullish.

The 14-day Relative Strength Index (RSI) oscillates in the 60.00-80.00 range, suggesting a strong bullish momentum.

The asset could rise to near the July 5 low of 0.8950 and the psychological resistance of 0.9000 after breaking above the November 14 high of 0.8918.

In an alternate scenario, a downside move below 38.2% Fibo retracement at 0.8700 could drag the asset towards the October 23 low of 0.8650, followed by the November low of 0.8616.

USD/CHF daily chart

• USD/CHF rebounds to near 0.8835 in Wednesday’s early European session. 
• Markets have pared bets for a 25 bp) interest-rate cut at the December meeting. 
• Any signs of escalating tensions between Russia and Ukraine could boost the CHF, a safe-haven currency.

The USD/CHF pair recovers some lost ground to around 0.8835, snapping the three-day losing streak during the early European session on Wednesday. The growing expectations for a less aggressive policy easing by the Federal Reserve (Fed) provide some support to the pair. Later on Wednesday, the Fed Lisa Cook and Michelle Bowman are set to speak. 

The hawkish remarks from Fed Chair Jerome Powell lifts the USD broadly. Powell said that he wasn’t 'in a hurry' to lower interest rates, which reduced the possibility of rate cuts in December to less than 60%, down from 82% earlier in the week. Kansas City Fed President Jeffrey Schmid said it remains uncertain how far interest rates can fall, but the recent cuts by the Fed indicate confidence that inflation is heading toward its 2% target.

On the Swiss front, heightened tensions between Russia and Ukraine, and its allies in the West might boost the safe-haven flows, benefiting the Swiss Franc CHF). Russia’s Defense Ministry said on Tuesday that Ukraine fired six ballistic missiles at a facility in Bryansk and that ATACMS missiles had been used in the attack.

• USD/CHF trades stronger to near 0.8835 in Tuesday’s early European session. 
• Fed easing bets pared on Trump policy outlook, and strong US economic data. 
• Geopolitical risks might boost the Swiss Franc and create a headwind for the pair. 

The USD/CHF pair edges higher to around 0.8835 during the early European session on Tuesday, bolstered by the firmer Greenback. Switzerland’s October Trade Balance will be released later on Tuesday. Also, the Federal Reserve’s (Fed) Jeffrey Schmid is set to speak. 

The strong US economic data and potential inflation from proposed tariffs have fuelled speculation that the Fed would slow the path of rate reductions, supporting the US Dollar (USD). Additionally, the cautious remarks from Fed Chair Jerome Powell contribute to the USD’s upside. Powell emphasized that the robust economic growth, solid job market, and inflation that remains above its 2% target mean the US central bank does not need to rush to lower interest rates.

Investors await comments from the Fed officials for further cues about the US interest rate trajectory. Markets have pared bets for a 25 basis points (bps) interest-rate cut at the December meeting to less than 59%, down from 62% a day earlier, according to CME FedWatch.

Nonetheless, heightened concerns about the Russia-Ukraine conflict and the ongoing geopolitical tensions in the Middle East could boost the safe-haven flows, benefiting the Swiss Franc. Joe Biden has allowed Ukraine to strike inside Russia with long-range US missiles for the first time, according to CNN News on Sunday. US sources said that Ukraine plans to conduct its first long-range attacks in the coming days, while Russia vowed to retaliate to what it called a "radical change" in the war. 

The Swiss Franc (CHF) weakening this episode (QTD) comes alongside the decline also seen in other major FX, though the magnitude of CHF depreciation was slightly lesser (- 4.7% vs USD) compared to JPY, EUR, GBP, AUD (down over 5-8% vs USD). USD/CHF was last seen at 0.8871 levels, OCBC FX analysts Frances Cheung and Christopher Wong note.

Bullish momentum on daily chart intact

“Safe-haven characteristic of CHF was likely one of the mitigating factors that saw CHF fell by less. Nevertheless, US election outcome was one of the main reasons that triggered broad USD strength as market contemplates a return of US exceptionalism under Trump presidency/ Red sweep.”

“Bullish momentum on daily chart intact though RSI shows signs of easing from near overbought conditions. Near term retracement not ruled out. Support at 0.8800/20 (200 DMA, 50% fibo retracement of 2024 high to low), 0.8720 (21 DMA). Resistance at 0.89 (61.8% fibo), 0.9020 (76.4% fibo).”

“Data of interests this week include sight deposits (Mon), trade data, Swiss watch exports (Tue).”

• USD/CHF drifts lower to near 0.8875 in Monday’s early European session. 
• The US Retail Sales rose 0.4% in October vs. 0.8% prior, stronger than expected. 
• The safe-haven flows might support the Swiss Franc. 

The USD/CHF pair softens to around 0.8875 on Monday during the early European session, pressured by the weakening of the US Dollar (USD). Investors will keep an eye on the Swiss Industrial Production for the third quarter (Q3) and the Federal Reserve’s (Fed) Austan Goolsbee speech later on Monday. 

The Greenback edges lower as Trump Trades lose momentum. However, the encouraging US economic data and the cautious comments from the Fed officials might cap the downside for the pair. On Friday, Boston Fed President Susan Collins stated that monetary policy remains restrictive and an interest rate cut is still on the table for December, but a final decision would be based on the incoming data. Meanwhile, Chicago Fed President Austan Goolsbee said that markets tend to overreact to interest rate changes and that the Fed should maintain a slow and steady approach to reaching the neutral rate.

Data released by the Commerce Department's Census Bureau on Friday showed that US Retail Sales increased by 0.4% in October, following the 0.8% rise recorded in September (revised from 0.4%), beating the estimation of 0.3%. 

On the other hand, the renewed geopolitical tensions between Russia and Ukraine might boost the safe-haven currency like the Swiss Franc (CHF). Citing two US officials familiar with the decision, CNN News reported on Sunday that US President Joe Biden's administration allowed Ukraine to use US arms to strike inside Russia in a significant reversal of Washington's policy in the Ukraine-Russia conflict. 

 

• USD/CHF is in a strong uptrend which keeps making higher highs. 
• However it has reached overbought levels according to the RSI momentum indicator 
• This means bulls should be aware of the increased risk of pullbacks. 

USD/CHF continues rising in its established uptrend but it has now reached overbought levels (above 70) according to the Relative Strength Index (RSI) momentum indicator. When this occurs it advises long-holders not to add to their positions because of the increased risk of a pullback developing.

USD/CHF Daily Chart 

According to technical analysis theory “the trend is your friend” which means it is better to trade in the direction of the dominant trend. As such, the odds favor more upside for USD/CHF. The RSI could continue to remain overbought or fall back into neutral territory first as the price pulls back. 

The pair has now surpassed the target at 0.8873 (July 30 swing high) and is on its way to the next target at 0.9050 (July 2 swing high). Another possible target is 0.9000 due to its significance as a round-number and psychological level.  

• USD/CHF retreats from a four-month high of 0.8917 recorded on Thursday.
• Fed’s Powell stated that US economic performance has been "remarkably good," allowing to lower rates gradually.
• The Swiss Franc could face challenges due to the increased odds of an SNB’s rate cut in December.

USD/CHF pauses its five-day winning streak, trading around 0.8900 during Friday’s Asian session after retreating from a four-month high of 0.8917 reached on Thursday. This pullback is likely due to a downward correction in the US Dollar (USD) following remarks from Federal Reserve (Fed) Chair Jerome Powell.

Fed’s Powell stated that the recent performance of the US economy has been "remarkably good," allowing the Federal Reserve the flexibility to gradually lower interest rates. Meanwhile, Richmond Fed President Thomas Barkin stated that while the Fed has made strong progress so far, there’s still more work to be done to keep the momentum going.

The US Producer Price Index (PPI) rose by 2.4% year-over-year in October, up from a revised 1.9% increase in September (previously 1.8%) and surpassing market expectations of 2.3%. Meanwhile, the Core PPI, which excludes food and energy, increased by 3.1% YoY, slightly above the forecasted 3.0%.

The downside for the USD/CHF pair may be limited, as the Swiss Franc (CHF) could weaken further with the increased likelihood of an interest rate cut by the Swiss National Bank (SNB) in December. This expectation follows Switzerland's inflation rate falling to 0.6% in October, the lowest in over three years, signaling inflation is under control.

SNB Vice Chairman Antoine Martin stated in an interview published on Monday that the SNB is not committed to additional interest rate cuts in December. This comes despite earlier comments suggesting potential reductions to address inflation.

At its September meeting, the Swiss National Bank (SNB) indicated readiness for further rate cuts, with both Chairman Martin Schlegel and Vice Chairman Antoine Martin suggesting the possibility of additional reductions, including a potential return to negative rates, according to Reuters.

• USD/CHF extends its established bull trend higher. 
• The RSI momentum indicator is flashing overbought suggesting increased risk of a pullback. 

USD/CHF breaks above the 200-day Simple Moving Average (SMA) and extends its short and medium-term uptrend. 

USD/CHF Daily Chart 

Given the technical analysis theory that “the trend is your friend” the odds favor more upside. 

However, the Relative Strength Index (RSI) momentum indicator is overbought which advises long holders not to add to their long positions because of the increased risk of a pullback. If a pullback does evolve it will provide a good opportunity to buy at a lower price and catch the uptrend before it resumes. Any correction is likely to find solid support at the 200-day SMA at around 0.8825-30. 

The pair has surpassed the target at 0.8873 (July 30 swing high) and is on its way to the next target at 0.9050 (July 2 swing high). Another possible target is 0.9000 due to its significance as a round-number and psychological level.  

• USD/CHF continues gaining positive traction amid relentless USD buying.
• The Trump trade optimism and elevated US bond yields underpin the USD.
• Technical buying above the 200-day SMA contributes to the positive move.

The USD/CHF pair builds on the previous day's breakout momentum above a technically significant 200-day Simple Moving Average (SMA) and gains traction for the fifth successive day on Thursday. This also marks the sixth day of a positive move in the previous seven and lifts spot prices to the 0.8875 region, or the highest level since July 24 during the Asian session. 

The US Dollar (USD) prolongs the post-US election rally and jumps to a fresh year-to-date (YTD) peak, and turns out to be a key factor acting as a tailwind for the USD/CHF pair. Investors remain optimistic that US President-elect Donald Trump's policies will spur growth and believe that expected protectionist tariffs could stimulate inflation. This might force the Federal Reserve (Fed) to pause its easing cycle, which continues to underpin the Greenback. 

Meanwhile, the US consumer inflation data released on Wednesday reaffirmed bets that the Fed would deliver a third interest rate cut in December against the backdrop of a softening labor market. That said, slower progress toward bringing inflation down could result in fewer rate cuts next year. Adding to this, hawkish remarks by several Fed officials keep the US Treasury bond yields elevated near a multi-month top and further offer support to the buck. 

Market participants now look forward to the US economic docket – featuring the release of the usual Weekly Initial Jobless Claims data and the Producer Price Index (PPI). The focus, however, will remain glued to Fed Chair Jerome Powell's speech later during the US session, which will be scrutinized for cues about the future rate-cut path. This will play a key role in influencing the USD price dynamics and provide some meaningful impetus to the USD/CHF pair.

• USD/CHF extends its upside to near 0.8830 in Wednesday’s early European session. 
• The US October CPI inflation data will take center stage on Wednesday. 
• The uncertainty surrounding Trump’s policy and geopolitical risks might cap the pair’s upside.

The USD/CHF pair trades in positive territory for the fourth consecutive day around 0.8830 during the early European session on Wednesday. The rally in the US Dollar (USD) due to the Trump trades provides some support to the pair.

The Trump trades have underpinned the Greenback and US Treasury bond yields as markets expect the Federal Reserve (Fed) to slow the pace of future rate reduction. The markets have priced in nearly 62.4% of the 25 basis points (bps) rate cut by the Fed at the December meeting, down from 75% last week, according to the CME FedWatch Tool. 

Market players will keep an eye on the key US Consumer Price Index (CPI) inflation data for October, which is due later on Wednesday. The headline CPI is estimated to rise 2.6% YoY in October, faster than the previous reading of a 2.4% increase. The core CPI is expected to remain at 3.3% YoY in October. Meanwhile, the monthly CPI and the core CPI are expected to show an increase of 0.2% and 0.3%, respectively.

A downside surprise in the US annual CPI inflation might diminish the expectations of a December Fed rate cut and could exert some selling pressure on the USD. On the other hand, the markets could push back against expectations for a rate cut in December on hotter-than-expected CPI readings, lifting the Greenback. 

On the other hand, the safe-haven flows could boost the Swiss Franc (CHF) and might cap the upside for the pair. Traders will monitor the development surrounding increased uncertainty about the impact of likely tariffs in the upcoming Trump administration and the ongoing geopolitical tensions in the Middle East.