USD/CHF extended its gains ahead of the US PPI to almost 0.9100.

• USD/CHF has appreciated as the Federal Reserve is expected to keep interest rates high for longer.
• Federal Reserve Vice Chairman Philip Jefferson said interest rates should be kept higher until there are clear signs of easing inflation.
• The Swiss franc could face selling pressure as the SNB focuses on fighting inflation.

USD/CHF continues its third straight session of gains, trading around 0.9090 during Asian hours on Tuesday. The US dollar is rising against the Swiss franc (CHF) after cautious comments from Federal Reserve (Fed) officials highlighted the importance of keeping interest rates high for longer given rising inflation. Federal Reserve Vice Chairman Philip Jefferson reiterated that stance Monday, arguing that interest rates should remain current until there are signs of easing inflation.

On Tuesday, traders will be watching the US Producer Price Index (PPI), a pivotal economic indicator. PPI reports can have a huge impact on the US market. Traders can use PPI data to evaluate potential outcomes for the Consumer Price Index (CPI). If the PPI indicator exceeds expectations, the US dollar could strengthen further.

On the Swiss front, SECO Consumer Climate (YoY) fell slightly in April to -38.1. However, it still lags well behind its long-term average. On Tuesday, producer and import prices for April, an indicator of consumer price inflation provided by the Swiss Federal Statistics Office, will be released.

The Swiss franc could suffer as the Swiss National Bank (SNB) deliberately diverts attention from strengthening the Swiss franc (CHF) and the central bank focuses on fighting inflation. Last week, the SNB increased its foreign exchange reserves to 720 billion Swiss francs in April, marking the fifth consecutive increase.