USD/CHF settles below 1-week high, posts weekly loss

The USD/CHF currency pair settled below recent high of 0.8000, its strongest level since September 26th, after data showed US services sector activity had unexpectedly stalled in September, while Swiss CPI inflation remained stable.

Consumer prices in Switzerland went up 0.2% year-on-year in September, matching the rate in the prior two months. The latest figure came below market consensus.

The Swiss National Bank had said it forecast average inflation at 0.2% for 2025.

The SNB left its policy rate without change at 0% at its September 25th meeting. This way, borrowing costs remained at their lowest level since August 2022.

The central bank also signaled openness to more rate cuts in case deflation returns.

Meanwhile, the ISM Services Purchasing Managers’ Index dropped to 50.0 in September from 52.0 in August.

The latter came after earlier data by ADP showed US private payrolls had decreased by 32,000 in September following a revised down 3,000 drop in August.

The ongoing US government shutdown hampered public economic activity, risked job cuts and delayed crucial economic data, including the Non-Farm Payrolls report, ahead of the upcoming Federal Reserve policy meeting.

Markets are now pricing in about a 98% chance of a 25 basis point Fed rate cut in October and an 87.5% chance of another 25 bps cut in December.

The major Forex pair lost 0.36% for the week.