• The USD/CHF pair is trading flatly at 0.9125 on Wednesday morning in Europe.

• Better than anticipated, the US CB’s Consumer Confidence increased to 102.0 in May from 97.5 in April.

• It is projected that the GDP of Switzerland will increase by 0.3%.QoQ for the first quarter.

On Wednesday morning during the early European session, the USD/CHF pair is trading flat at 0.9125. Ahead of this week’s critical inflation numbers, traders continue to exercise caution. John Williams of the Fed will be speaking later on Wednesday in conjunction with the release of the Fed’s Beige Book.

Given how persistent inflation is, it is doubtful that the US Federal Reserve (Fed) will lower rates until later in the year. Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, stated on Tuesday that although the US central bank’s policy stance remains restrictive, more rate hikes are not completely out of the question. The CME FedWatch tool indicates that investors are currently putting in about a 50% possibility that the Fed will keep rates in September.

Consumer Confidence increased to 102.0 in May from 97.5 in April, according to data released by the US Conference Board on Tuesday. This was better than the estimated level of 95.7. After declining for three months, the number unexpectedly increased in May. However, concerns about inflation remained, and US consumers anticipated higher interest rates in the next year. This keeps supporting the US dollar and boosting the USD/CHF exchange rate. 

Switzerland’s Gross Domestic Product (GDP) will be released on Thursday by the State Secretariat for Economic Affairs (SECO). For the first quarter (Q1) of 2024, GDP growth is predicted to increase by 0.3%.QoQ for the first quarter. If the report’s reading exceeds anticipated, the Swiss Franc (CHF) may find some support.

In addition, Al Jazeera reports that Israeli forces destroyed a tent camp in a designated “safe zone” west of Rafah, killing at least 21 people—13 of whom were women and girls—in the most recent round of mass killings of Palestinian civilians. Investors will attentively monitor any developments in the Middle East’s geopolitical concerns. Any indications of growing danger might increase the value of safe-haven assets like the CHF and limit the pair’s rise.