USD/CHF drops to near 0.8000 as US Dollar slides further

• USD/CHF slides to near 0.8000 as the US Dollar extends its downside.

• Fed’s Powell warns of labor market risks despite steady economic growth.

• Month-on-month Swiss producer inflation deflated by 0.2% in September.

The USD/CHF pair falls to near 0.8000 during the late Asian trading session on Wednesday. The Swiss Franc pair faces selling pressure as the US Dollar (USD) extends its downside, following comments from Federal Reserve (Fed) officials signaling the need for more interest rate cuts.

During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.15% lower to near 98.85.

On Tuesday, Fed Chair Jerome Powell expressed that the central bank would need to adopt a delicate balancing approach in upcoming policy meetings amid steady growth, with increasing challenges across employment and inflation. “Data before the US government shutdown suggested growth may be better than expected, but right now there is no risk-free path for monetary policy,” Powell said.

Fed’s Powell didn’t discuss reducing interest rates further this year, while Fed Governor Michelle Bowman and Boston President Susan Collins explicitly argued in favor of reducing interest rates in the remaining year.

Meanwhile, US President Donald Trump has announced that he will permanently shut down Democrats’ programs and will unveil the list on Friday.

In Switzerland, cooling price pressures are boosting expectations for the Swiss National Bank (SNB), pushing interest rates into a negative territory. On Tuesday, the data showed that Producer and Import Prices dropped by 0.2% on a month in September. Economists expected inflation at the wholesale level to have grown at a similar pace. However, the pace of decline was slower than 0.6% in August.