USD/CHF ticks down to near 0.7950 despite recovery in US Dollar

• USD/CHF trades subduedly around 0.7950 despite a decent recovery move in the US Dollar.
• The US Dollar gains ahead of the US Senate's fifth time voting on the stopgap bill.
• SNB's Schlegel is confident that inflation will accelerate in the coming quarters.

The USD/CHF pair edges down to near 0.7955 during the late Asian trading session on Monday. The Swiss Franc pair faces slight selling pressure even as the US Dollar (USD) recovers firmly, suggesting significant strength in the Swiss Franc (CHF).

The Swiss currency attracts bids as Swiss National Bank (SNB) Chairman Martin Schlegel has expressed confidence that inflationary pressures could accelerate in the coming quarters. "Inflation is expected to rise slightly in the coming quarters," Schlegel said last week, but cited that US pharma tariffs have raised "downside" risks a bit.

The scenario of rising inflation expectations diminishes fears of the SNB pushing interest rates into a negative territory. SNB's Schlegel has already warned that negative borrowing rates could be unfavorable for pensioners and financial institutions.

At the start of the week, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, jumps 0.3% to near 98.00 during late Asian trading hours.

The US Dollar gains even as Washington faces the risk of mass lay-offs in the wake of a partial government shutdown. The US Senate is scheduled to meet on Monday to vote on passing the short-term funding bill. This will be the fifth time that Senators vote on the stopgap bill, which has already been passed by the House of Representatives.