• The US Dollar remains weak against the Swiss Franc, trading around 0.8030 after softer-than-expected Swiss economic data.
• Switzerland’s Producer and Import Prices fell by 0.2% in September, confirming a persistent deflationary trend.
• Investors now await Fed Chair Powell’s speech amid ongoing economic uncertainty and trade tensions.

USD/CHF stays under pressure on Tuesday, with the pair hovering around 0.8030 following weaker-than-expected inflation data from Switzerland. Risk aversion, fueled by prolonged concerns over the US government shutdown and renewed US-China trade tensions, continues to support demand for the safe-haven Swiss Franc (CHF).

According to the Swiss Federal Statistical Office, Producer and Import Prices declined by 0.2% MoM in September, compared with expectations for a 0.2% rise and following a 0.6% drop in August. The decline was mainly driven by lower prices for petroleum, natural gas, and petroleum products, while green coffee became more expensive. On a yearly basis, prices fell by 1.8%, matching the previous month’s pace and marking the 29th consecutive month of producer deflation.

This persistent disinflationary trend reinforces expectations that the Swiss National Bank (SNB) could further ease its monetary policy at its December meeting. According to Barclays and Bloomberg Economics, the SNB may cut its policy rate by 25 basis points to -0.25% if the strong CHF continues to weigh on domestic prices and growth.

Jean Dalbard, economist at Bloomberg, said that “the combination of a strong Franc and weak domestic inflation is increasing pressure on the SNB,” adding that “the central bank may be forced to ease policy further by the end of the year.”

In the United States, market participants are focusing on Federal Reserve (Fed) Chair Jerome Powell’s upcoming remarks at the National Association for Business Economics (NABE) annual meeting in Philadelphia. With no major data releases due to the ongoing government shutdown, Powell’s speech is unlikely to shift market expectations of two rate cuts by December.

Political uncertainty in Washington and renewed US-China trade tensions continue to weigh on sentiment, keeping the Swiss Franc supported below the 0.8050 level against the US Dollar (USD).