USD/CHF nearing parity on strong USD demand

• Investors keep buying the US dollar as they expect rising inflation to push the Fed to announce a rate hike in June. 
• The 10-year US Treasury yield is trading higher on Tuesday further adding to the buying pressure on the greenback.

The USD/CHF is trading at about 0.9952 up 0.43 % on Tuesday as the European forex session came to an end. 

The swissy uptrend is accelerating towards the parity level as the US dollar demand is relentless ahead of the widely awaited FOMC meeting on Wednesday

Earlier in the day, the US ISM (Institute for Supply Management) Price Paid for April advanced to 79.3 beating the market consensus set at 78 in April. Interestingly raw materials prices have been trending higher for the 26th consecutive month, therefore sending inflation expectations higher in the process.

The US dollar is in a strong bull trend as the Federal Reserve Bank is expected to confirm a rate hike in June at its next meeting on Wednesday at 18:00 GMT. Looking back, on Monday, the Core Personal Consumption Expenditure Price Index (PCE) over the year to March came in at 1.9% flirting with the 2% inflation target of the Fed.

Additionally, the 10-year US Treasury yield is trading higher on Tuesday further adding to the buying pressure on the greenback. 

USD/CHF daily chart

The trend is bullish. Resistances are seen in the 0.9978-1.000 region and at the 1.0038 swing high while supports are seen at 0.9871 Friday’s low and at the 0.9800 handle.