USD/CHF Approaches 0.90 As US Debt-Ceiling Concerns Generate Negative Sentiment

During the Asian session, the USD/CHF pair is approaching the psychological resistance of 0.9000. The Swiss franc asset hopes to extend its two-day winning trend if it surpasses Friday's peak of 0.8988. As United States debt-ceiling concerns have bolstered the risk-aversion theme, the major is looking for additional gains.

After a mildly bearish session on Friday, S&P500 futures have extended their losses in the Asian session, indicating investors' caution ahead of negotiations over the US debt ceiling. Investors are concerned that the US economy's long-term credibility will be severely damaged if the US Treasury defaults on its payments. Also, the likelihood of a recession will increase substantially.

The US Dollar Index (DXY) is exhibiting a sideways trend near 102.70, but the upside is favored as safe-haven demand improves despite the likelihood of no further rate increases by the Federal Reserve (Fed).

Major US economic indicators are urging the Federal Reserve to suspend its rate-hiking cycle. Due to tight credit conditions and a bleak economic outlook, US inflation and producer prices for goods and services at factory gates have slowed, and labor market conditions are deteriorating, indicating that the Fed will halt its aggressive policy-tightening spree to protect the economy from severe damage.

Regarding the Swiss franc, investors await the publication of the Producer and Import Prices (April) data.  Monthly economic data is anticipated to contract by 0.1% as opposed to expanding by 0.2%. In addition, the annual data will decrease to 1.1% from the previous 2.1%. This indicates that the Swiss National Bank's (SNB) restrictive monetary policy approach is effectively counteracting inflationary pressures.