Market Analysis

The USD/CHF pair continues its upward trend for the third consecutive session, trading around 0.9090 during Tuesday's Asian session. The US Dollar is gaining strength against the Swiss Franc (CHF) due to cautious remarks from Federal Reserve (Fed) officials, who stress the need to maintain higher interest rates for an extended period due to persistent inflation. Fed Vice Chair Philip Jefferson reiterated this on Monday, advocating for keeping rates steady until there are clear signs of inflation subsiding.

Traders will be closely monitoring the US Producer Price Index (PPI) on Tuesday, a critical economic indicator. The PPI report could significantly influence the US market, as traders may use the data to predict the outcome of the Consumer Price Index (CPI). If the PPI data exceeds expectations, it could further bolster the US Dollar.

On the Swiss front, the SECO Consumer Climate (YoY) slightly declined in April, registering -38.1, still well below the long-term average. Additionally, April's Producer and Import Prices data, an indicator of consumer price inflation, is set to be released on Tuesday by the Federal Statistical Office of Switzerland.

The Swiss Franc may face challenges as the Swiss National Bank (SNB) shifts its focus from actively strengthening the CHF to combating inflation more aggressively. Last week, the SNB's foreign exchange reserves rose to CHF 720 billion in April, marking the fifth consecutive increase.

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Paraphrasing text from "FX Street" all rights reserved by the original author.