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  • USD/CHF gained traction in the European session on Friday.
  • US Dollar Index rose to its highest level in 11 days.
  • Focus shifts to PCE inflation report from the US.

The USD/CHF pair traded in a very tight range during the Asian trading hours but turned north ahead of the American session, reaching its highest level in eight days at 0.9028. As of writing, the pair was up 0.65% on the day at 0.9026.

DXY pushes higher ahead of key data

The renewed USD strength seems to be fueling USD/CHF climb on Friday. The US Dollar Index is  currently trading at its highest level since May 17 at 90.30, rising 0.33% on a daily basis. In the absence of significant fundamental drivers, the modest increase seen in the US Treasury bond yields helps the greenback outperform its rivals.

Later in the session, the US Bureau of Economic Analysis will release the Personal Consumption Expenditures (PCE) Price Index data for April. The Core PCE Price Index is expected to rise to 2.8% on a yearly basis from 1.9% in April. A positive surprise could revive inflation fears and boost the USD on the back of rising US T-bond yields. On the other hand, a soft inflation print could force USD/CHF to lose its traction.

Other data releases from the US will include Personal Spending, Personal Income and the University of Michigan’s Consumer Sentiment Index.

Technical levels to watch for