The US Dollar climbed to a yearly peak of 102.96 after October CPI data beat forecasts, pushing USD/CHF up nearly 1% to 0.8335 as markets fully price in a December Fed rate hike.
The pair has jumped nearly 1% to around 0.8335, a four-week high, after hotter-than-expected October US CPI (0.4% MoM headline vs 0.3% forecast, 0.3% core vs 0.2% forecast). Markets now fully price a December Fed hike (87.1% odds of 25 bps, 12.9% of 50 bps), while the SNB holds at 0%, widening the rate gap in the dollar's favour. Near-term momentum is clearly dollar-positive.
The dollar strengthened across the board on 11 November, hitting a fresh yearly high with DXY at 102.96, above the previous October peak of 102.94. The October CPI beat and fully priced December Fed hike (87.1% chance of 25 bps) support further dollar strength, with traders also expecting rate increases into 2027.
The franc fell 1.00% against the dollar on 11 November and was the weakest of the majors, as the SNB holds its policy rate at 0% while Fed hike expectations build. Rising Swiss inflation (1.5% in October, highest in nearly three years) and Schlegel's willingness to adjust policy are the main counterweights that could support the franc later.
The US Dollar surged to a fresh yearly high of 102.96 on the DXY index, driven by hotter-than-expected October CPI data showing a 0.4% MoM headline increase. Markets have fully priced in a December Federal Reserve rate hike, with an 87.1% probability of a 25 bps move, widening the interest rate gap against the Swiss National Bank's 0% policy rate.
Hotter-than-expected October US inflation data (0.4% MoM headline vs 0.3% forecast) plus hawkish Fed remarks pushed markets to fully price a December rate hike, while the Swiss National Bank keeps its rate at 0%. The widening rate gap in favour of the dollar drove the pair up nearly 1% to around 0.8335, a four-week high.
Possibly, if Swiss inflation keeps climbing. It reached 1.5% in October, its highest in nearly three years, and SNB Chairman Schlegel said the bank would not hesitate to adjust policy and could even intervene in foreign exchange markets if needed.
The October US CPI beat forecasts (0.4% MoM headline and 0.3% core vs 0.2% expected), and hawkish comments from Fed officials including Governor Waller raised the prospect of a 50 bps December hike. Markets now fully price a December rate increase, and the Dollar Index rose to 102.96, above the prior yearly peak of 102.94.
The SNB keeps its policy rate at 0% while markets fully price a December Fed rate hike after the October US CPI beat. The widening interest rate gap favours the dollar, and the franc lost 1.00% against the dollar, making it the weakest major currency that day.