The USD/CHF pair is experiencing a decline in momentum, currently trading near 0.8030 in the early European session on Friday. Increasing speculation regarding a potential US interest rate cut next week, along with the possibility of White House economic adviser Kevin Hassett assuming the role of Federal Reserve Chair, is putting pressure on the US Dollar against the Swiss Franc. The inflation report for the US Personal Consumption Expenditures Price Index for September is set to be the focal point later on Friday. The USD/CHF pair has declined to approximately 0.8030 during the early European session on Friday.
The potential for Hassett to assume the role of Fed Chair following Jerome Powell’s term conclusion in May may exert pressure on the USD. The recent Swiss CPI inflation data, which came in softer than anticipated, may exert downward pressure on the Swiss Franc and potentially mitigate the losses of the pair. The Greenback is experiencing selling pressure as traders heighten their expectations for a 25 basis points (bps) rate reduction from the US central bank at its December meeting.
Reports indicates that financial markets are currently assigning a nearly 85% probability to a quarter-point rate cut next week. Additionally, US President Donald Trump stated on Tuesday that he intends to reveal his selection to replace Jerome Powell as the head of the Fed in the early part of next year. White House economic adviser Kevin Hassett has positioned himself as the leading candidate for the next Fed chair, a development that could potentially lead to a decline in the USD, as experts anticipate that Hassett will advocate for additional rate cuts.
In November, Switzerland’s Consumer Price Index experienced an unexpected decline to 0%, while the core measure decelerated to its lowest point in four years, as reported on Wednesday. The softer-than-expected inflation reading reinforces the perspective that the Swiss National Bank will continue to uphold an accommodative monetary policy. This development may result in a depreciation of the Swiss Franc against the Greenback, potentially providing support for the pair.