USD/CHF trimming losses after solid US Retail Sales

The USD/CHF saw some minor losses before levelling off at 0.8885, suggesting that inflation was slowing down. October’s US Producer Price Index (PPI) increased 1.3% year over year, less than the 1.9% increase that was anticipated.

However, October’s Retail Sales performed better than expected, with a 0.1% month-on-month decline. The US Dollar recovered, with the 2-year rate rising to 4.91% and the 5-year and 10-year rates increasing to 4.52% and 4.53%, respectively.

These rates may be anticipating that Retail Sales signaled a threat to the Fed’s progress on inflation, justifying further tightening. Markets also cheered the cooling of the Consumer and Core Consumer Price Index (CPI) and bet on sooner rate cuts by the Fed. A pause is now priced in for the December meeting.

The USD/CHF holds a bearish technical outlook, with indicators indicating sellers are seizing control.