USD/CHF clings to gains near 0.7970, focus shifts to US CPI data

• USD/CHF holds onto gains near 0.7970 as the US Dollar trades firmly.

• Receding US-China trade frictions have improved the appeal of the US Dollar.

• Investors await the US CPI data for September.

The USD/CHF pair trades firmly near Tuesday’s high around 0.7970 during the Asian trading session on Wednesday. The Swiss Franc pair exhibits strength as the US Dollar (USD) trades broadly firm on hopes that the United States (US) and China will reach a trade deal soon.

At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades firmly near 98.90.

The speculation for the US-China reaching a consensus intensified earlier this week after President Donald Trump commented that he hopes to reach a fair deal with China after his meeting with leader Xi Jinping in South Korea later this week.

However, US President Trump on Tuesday expressed slight concerns regarding the likelihood of the meeting with Beijing.

On the domestic front, investors await the delayed US Consumer Price Index (CPI) data for September, which will be published on Saturday. The inflation data has been delayed due to the ongoing US government shutdown. Economists expect the US headline inflation to have grown at an annual pace of 3.1% against 2.9% in August, with core figures rising steadily by 3.1%.

Meanwhile, the Swiss Franc (CHF) exhibits a mixed performance while investors seek fresh cues on whether the Swiss National Bank (SNB) would push interest rates into a negative territory amid downside inflation risks. In September, the Swiss CPI deflated by 0.2% against a 0.1% decline seen in August.