remains on the defensive just above its lowest level since May 17 touched on Tuesday and is seen as a key factor acting as a headwind for the USD/CHF pair. The latest US consumer inflation figures released on Tuesday reaffirmed bets that the Federal Reserve will skip hiking interest rates at the end of a two-day policy meeting later this Wednesday and continues to undermine the Greenback.
The US Labor Department reported that the headline CPI barely rose in May and the yearly rate decelerated from 4.9% to 4.0% - the smallest increase since March 2021. The year-on-year inflation rate, however, was still twice the Fed's 2% target and supports prospects for further policy tightening.
Traders also seem reluctant to place aggressive bets and prefer to wait on the sidelines ahead of the highly-anticipated FOMC policy decision. Apart from this, the focus will be onChair Jerome Powell's comments at the post-meeting press conference. Market participants will look for fresh cues about the Fed's rate-hike path, which will play a key role in influencing the USD price dynamics and provide a fresh impetus to the USD/CHF pair.