USD/CHF climbs above 0.8450 as traders brace for US PCE data

• USD/CHF holds positive ground near 0.8485 in Friday’s early European session, up 0.32% on the day. 
• The SNB cut the interest rates by 25 bps, bringing its policy rate to 1.00% at its September meeting on Thursday. 
• Fed’s Cook said she 'wholeheartedly' backed rate cut. 

The USD/CHF pair attracts some buyers to around 0.8485 on Friday during the early European session. The Swiss Franc (CHF) weakens after the Swiss National Bank (SNB) reduced interest rates on Thursday. All eyes will be on the release of US Personal Consumption Expenditures (PCE) Price Index data, which is due later on Friday.

The Swiss central bank decided to cut the interest rates by 25 basis points (bps), bringing its policy rate to 1.00%, the lowest level since early 2023. Goldman Sachs analysts noted the SNB cut on Thursday was supported by lower inflationary pressure, driven by a stronger CHF and other factors, and they expect a further 25 bps reduction at the December meeting, citing its dovish guidance and new inflation projections.

The better-than-estimated US economic data on Thursday have provided some support to the US Dollar (USD) against the CHF. The US weekly Initial Jobless Claims for the week ending September 21 rose to 218K, up from the previous week's 222K (revised from 219K). The figure came in below the initial consensus of 225K. Meanwhile, US Durable Goods Orders were flat in August, compared to a rise of 9.9% in July, stronger than the expectation of a decline of 2.6%.

Nonetheless, the dovish remarks from the Federal Reserve (Fed) officials and rising bets of Fed rate reduction in the coming months could cap the upside for the USD. Fed Governor Lisa Cook stated on Thursday that she "wholeheartedly" supported the central bank's decision to cut interest rates by 50 bps, calling it an important step in maintaining the path to "moderate" economic growth.