USD/CHF steadies around 0.9320 amid uncertainty over the US inflation

• USD/CHF is oscillating in a narrow range of 0.9300-0.9323 ahead of the US inflation.
• FOMC member Charles Evans is hoping for an interest rate elevation by 200 bps this year.
• A higher inflation print will certainly underpin the 50 bps interest rate hike.

The USD/CHF pair is displaying back and forth moves in a narrow range of 0.9300-0.9323 after plunging from 0.9372 on Monday. The asset sensed selling pressure in the previous trading session amid multiple failed attempts of overstepping 0.9380.

The asset is likely to deliver wild swings later in the New York session after the release of the US Consumer Price Index (CPI). As per the market consensus, the yearly US CPI is likely to land at 8.5%, much higher than the February figure of 7.9%. Surely, this will underpin the 50 basis points (bps) interest rate hike for May’s monetary policy. On Monday, the speech from the Chicago Federal Reserve (Fed) President and Federal Open Market Committee (FOMC) member Charles Evans indicated that the Fed could tighten the interest rates by 200 bps this year. Execution of the same will push the borrowing rates near the neutral rates by this year itself.

Meanwhile, the US dollar index (DXY) is trading above the critical figure of 100.00 on the latest Reuters poll of economists, which advocates a consecutive 50 bps interest rate hike for the month of May and June, considering the likely multi-decade high US inflation at 8.5%. The 10-year US Treasury yields have climbed above 2.81% on advancing bets over a tight policy by the Fed in May.