Swiss Franc rose in European trade on track for the first profit in three days against dollar following Swiss inflation data, which rose past estimates in January.

The data raised pressures on Swiss National Bank policymakers, and bolstered the case for a 0.5% rate hike in March.

The dollar fell 0.2% against the franc to 0.9219, with a session-high at 0.9260.

The franc closed Friday down 0.15% against dollar, as the greenback muscled up against major rivals following positive US confidence data.

Swiss Inflation Data

Swiss consumer prices rose 3.3% in January, passing estimates of 2.9%, and up from 2.8% in December.

On a monthly basis, consumer prices rose 0.6% in January, past estimates of a 0.5% rise, and compared to December's 0.2% dip.

Swiss National Bank

Such data showed upward risks of inflation and raised the pressure on the central bank to hike interest rates by a successive 0.5% pace at next meetings. 

Swiss interest rates are currently stable at 1%, the highest since 2008, and becoming the the penultimate rates presented by major central banks worldwide.

Forecasts for 2023

Analysts expect the franc to remain strong in 2023 due to the flexible local economy and relatively low inflation compared to rivals.

The Swiss National Bank is expected to continue supporting the franc by successive rate hikes, wit analysts noting that the franc hasn't actually risen significantly past its 10-year average values. 

Gold prices fell in European trade after a hiatus from gains, almost touching five-week lows as dollar strengthened.

Dollar's strength comes as US 10-year treasury yields rally as well following data and bullish remarks by Fed officials, raising the chances of multiple more rate hikes by the Fed this year.

Gold Prices

Gold prices fell 0.4% to $1,856 an ounce, with an intraday high at $1,866, after rising 0.2% on Friday, away from five-week lows at $1,852. 

The Dollar

The dollar index rose 0.25% on Monday for the second session against a basket of major rivals, hurting gold's standing. 

US 10-year treasury yields rose to six-week highs at 3.755%, following upbeat US data and bullish remarks by Fed officials. 

Fed Philadelphia President Patrick Harker said on Friday he expected interest rates to rise over 5% and be there for some time. 

Fed Rates

Current pricing for a 0.25% Fed rate hike in March stands at 91%, and for a 0.25% hike in May at 73%. 

Inflation Data

Now investors await US inflation data for January tomorrow, important for gauging inflationary pressures on Fed officials. 

Recent Michigan one-year inflation expectations survey stood at 4.2% for February, above the final number in January. 

Estimates

Analysts expect the dollar and US treasury yields to continue gaining ground, in turn pressuring gold futures, as inflation is expected to remain strong for a long time. 

The SPDR 

Gold holdings at the SPDR Gold Trust remained flat on Friday at a total of 920.79 tones. 

Will Gold Prices tumble below $1,800?

It's possible for gold prices to slide below $1,800 if US inflation data were higher than expected, raising pressure on the Fed and forcing it to stick to rate hikes for a longer period of time.

Will Gold prices mark strong gains this week?

We here expect if US inflation data slowed down for the seventh straight session, chances of multiple US rate hikes will diminish, in turn underpinning gold prices, and vice versa. 

Euro fell in European trade against dollar for second straight session, hitting five-week lows on speculation about European interest rates and a widening policy gap between Europe and the US.

Dollar extended its gains on prospects of further policy hikes by the Federal Reserve for the longest possible duration this year, sending interest rates above 5.25%. 

EUR/USD fell 0.25% to 1.0655, the lowest since January 9, with a session-high at 1.0682, after losing 0.6% on Friday, the sixth loss in seven days following strong US consumer confidence data. 

Weekly Trading

Euro lost 1.1% last week against dollar, the second weekly loss in a row. 

Euro declined on profit-taking off ten-month highs and amid growing concerns about a widening policy gap between the US and Europe.

European Rates

The last ECB policy meeting opened speculation the bank might slow down the pace of rate hikes after the upcoming 0.5% rate hike in March.

The European Central Bank confirmed a big rate hike in March, however subsequent rate hikes are still undefined.

ECB President Christine Lagarde asserted the bank is awaiting fresh data to decide on upcoming policy moves.

Analysis

Some analysts believe euro's recent recovery was boosted by relief that the euro zone has overcome the worst of the energy crisis. 

As the energy crisis improved, European growth forecasts also improved, however energy security remains an ongoing problem.

The Dollar

The dollar index rose over 0.2% for the second straight session against a basket of major rivals. 

The gains come as US 10-year treasury yields rallied as well, bolstering investments in dollar.

It comes after strong US data last week and bullish remarks by the Federal Reserve, bolstering the case for several more rate hikes this year.

Expectations

Now most analysts expect euro to extend its decline against dollar until the major US inflation data tomorrow.

Oil prices rose on Friday after Russia announced plans to cut output in response to western sanctions against Russian energy. 

Reuters reported a spike in the prices of both crude futures, on track for 8% weekly profits. 

Russia said it plans to cut crude output in March by 500 thousand bpd, or 5% of total output.

The G7, EU, and Australia all agreed to ban maritime Russian oil priced above $60 a barrel starting December 5 as part of western sanctions on Russia for invading Ukraine.

The EU has already banned Russian oil products and put price ceilings starting February 5.

US crude futures due in March rose 2% to $79.6 a barrel as of 19:23 GMT.

Brent April futures rose 2.1% to $86.2 a barrel.