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- USD/CHF flat lines near 0.7805 in Wednesday’s early European session.
- Chinese and US leaders will hold talks in Seoul ahead of a high-profile leaders’ summit.
- SNB is expected to hold rates at zero through 2026, according to Reuters poll.
The USD/CHF pair trades on a flat note around 0.7805 during the early European trading hours on Wednesday. Traders await the key US inflation data and continue to assess the developments surrounding US-China talks later this week.
The South China Morning Post reported on Wednesday that US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will hold trade and economic talks in South Korea ahead of US President Donald Trump’s official visit to China.
The Trump-Chinese President Xi Jinping summit will take place in Beijing on Thursday and Friday. Earlier on Tuesday, Trump said that he would prioritize trade discussions during his summit with Chinese President Xi Jinping, and downplayed the amount of attention they would devote to the Iran war.
The US Producer Price Index (PPI) report will take center stage later on Wednesday. Markets expect the headline US PPI to show a rise of 4.9% YoY in April, compared to 4.0% in March, while the core PPI is projected to show an increase of 4.3% YoY in April versus 3.8% prior. Any signs of hotter inflation in the US could fuel bets on Federal Reserve (Fed) interest rate hikes later this year, which support the Greenback against the Swiss Franc (CHF).
The Swiss National Bank (SNB) has kept its policy rate unchanged at 0%. Reuters economists predict rates will hold at zero throughout the remainder of 2026, forcing the bank to rely primarily on currency intervention to control Franc strength.
“The SNB is not willing to introduce negative rates at this stage as the bar remains higher than back in 2015 … We continue to expect the SNB to remain on hold for the foreseeable future,” said Nikolay Markov, lead economist at Pictet Asset Management.
