USD/CHF remains confined in a range below the 0.8800 mark, FOMC Minutes eyed

• USD/CHF remains confined in a tight range amid a subdued US Dollar.
• US Retail Sales came in above expectations.
• Swiss Producer and Import Prices YoY for July came in at -0.6%, against the expectation of 0.5%.
• The FOMC Minutes will be the key event this week.

The USD/CHF oscillates around the 0.8745–0.8800 region in a narrow trading band during the early Asian session on Wednesday. Meanwhile, the US Dollar Index (DXY), a measure of the value of the USD against six other major currencies, consolidates its recent gains near 103.20.

The economic data released on Tuesday revealed that US Retail Sales came in above expectations. The headline figure climbed by 0.7% MoM, higher than the 0.4% estimated. Sales excluding the Automobile sector came in at 1%, versus the expected 0.4%. Lastly, the NY Empire Manufacturing Index for August declined to -19 from -1.

Minnesota’s Federal Reserve (Fed) President Neil Kashkari stated that he is pleased with the progress on inflation, but it is still too high. Kashkari noted the uncertainty regarding whether the Fed has done enough or needs to do more.

On the Swiss franc front, the Swiss Producer and Import Prices YoY for July came in at -0.6%, against the expectation of 0.5%. On a monthly basis, the figure contracted at 0.1% versus 0% prior. According to Bloomberg, the Swiss National Bank (SNB) will hike interest rates by 25 basis points (bps) to 2% in its September meeting.

Furthermore, the headling surrounding the US-China relationship remains in focus. As a result of President Joe Biden’s decision to restrict certain US technology investments in China, US investors have expressed concern that Beijing may retaliate or cease purchasing American technology. The renewed trade tension might benefit the safe-haven Swiss Franc and act as a headwind for the USD/CHF pair.

Moving on, the US Building Permits, Housing Starts, and Industrial Production will be released on Wednesday. However, the FOMC minutes will be the key event this week. Traders will take cues from the data and find trading opportunities around the USD/CHF pair.