Swiss Franc climbs to four-month high against US dollar

The Swiss Franc is testing higher ground against the US Dollar on Thursday, as risk appetite increases due to lower US inflation data.

The USD/CHF pair slipped through the 0.8600 handle, bolstering all major currencies and lifting the Swiss Franc into a new twenty-week high against the dollar.

The US inflation figures missed expectations, sparking a risk appetite rally as price growth deceleration takes hold in the US faster than most market participants anticipated.

The softer-than-expected inflation print widens the gap between the Fed’s outlook and investor expectations, leading to a heady 160 bps in rate cuts through the end of next December. US Initial Jobless Claims ticked up slightly for the week into December 15, but much less than markets were expecting.

Data focus on Thursday was on US Core Personal Consumption Expenditures (PCE) for the third quarter, which declined from 2.3% to 2.0% for the quarter. The US PCE Price Index figures on Friday are expected to print flat at 0.2%, but odds of a downside print are increasing as preview PCE inflation data miss the mark on Thursday.