Ella 
During the Asian trading session on Wednesday, USD/CHF was still fluctuating within a narrow range of 0.8765-0.8780. Stronger-than-expected U.S. CPI inflation data for February boosted the U.S. dollar (USD). However, a risk-off environment may boost safe-haven demand and benefit the Swiss franc. The pair is currently trading around 0.8776, up 0.02% on the day.
U.S. inflation remained high in February. The U.S. Labor Department reported on Tuesday that the U.S. Consumer Price Index (CPI) climbed to an annual rate of 3.2% from 3.1% in January. The overall CPI increased by 0.4% month-on-month and 0.3% month-on-month. Elsewhere, excluding volatile food and energy items, core CPI rose 0.4% month-on-month in February, above consensus expectations of 0.3%.
The red-hot CPI inflation report may influence Federal Reserve officials to wait until the summer before cutting interest rates. This in turn provides some support to the US dollar. Federal Reserve Chairman Jerome Powell said last week that the Fed is likely to cut interest rates this year, but the central bank needs to see more evidence of inflation data to ensure that inflation returns to its 2% target. Investors see a 70% chance of a rate cut in June, according to the CME FedWatch tool.
On the other hand, escalating geopolitical tensions, uncertainty and a risk-off environment in the Middle East may boost safe-haven assets such as the Swiss franc, which is negative for USD/CHF.
With no top-line economic data due from the US and Switzerland on Wednesday, the pair remains exposed to USD price dynamics and broader risk sentiment. Swiss producer and import prices will be released on Thursday, along with U.S. retail sales for February.
