USD/CHF was making some decent gains from July until the end of September, but sellers have taken control since the beginning of October, as markets have shown symptoms of anxiety with geopolitics remaining high, benefiting the CHF as a safe haven, while the USD is on a retreating trend due to lower inflation figures.

The FED has recently weighed in on this pair, as markets foresee no further hikes from them, which has pushed the USD lower. This pair dipped below 0.90 in late October and has continued to keep the bullish momentum going. As a result, the price of USD/CHF has fallen below 0.87, and further drops are predicted in the following days/weeks if the same sentiment continues.

Earlier today we had the inflation report from Switzerland which was expected to fall flat at 0.0% in October. Inflation didn’t surge in Switzerland as it did in the EU or the US, and it has been softening up too.

Swiss October CPI Inflation Report

• November CPI +1.4% vs +1.7% y/y expected
• October CPI Inflation +1.7%
• Core CPI +1.4% y/y
• Prior +1.5%

The good news for the SNB is that core annual inflation is seen keeping below the 2% mark and that will give them more confidence to keep policy on hold next week.

USD/CHF Live Chart