- USD/CHF is trading in negative territory near 0.8960 for the second consecutive day on Friday.
- Traders increased their bets on Fed rate cuts in September after the softer-than-expected US CPI inflation report for June.
- Speculation that the SNB will cut interest rates further could limit the pair’s downside.
The USD/CHF pair is trading on a weaker note around 0.8960 during the early European session on Friday. The pair’s decline is supported by a softer US Dollar (USD) after US consumer prices unexpectedly fell in June. Investors will take further cues from the US June Producer Price Index (PPI) and the preliminary Michigan Consumer Sentiment Index for July for fresh impetus, which will be released later on Friday.
The US CPI fell 0.1% on a monthly basis in June after remaining unchanged in May, the Bureau of Labor Statistics reported on Thursday. This figure recorded the lowest monthly reading since May 2020. Meanwhile, the annual CPI rose 3% on a yearly basis in the same reporting period, the lowest reading in a year. The softer inflation reading boosted expectations that the Federal Reserve (Fed) would cut interest rates in the coming months.
Chicago Fed President Austan Goolsbee said early Friday that the latest inflation data was “excellent,” adding that the reports provided evidence that the Fed is on track to hit its 2% target. Meanwhile, St. Louis Fed President Alberto Musalem noted “encouraging further progress” toward the Fed’s inflation goal. San Francisco Fed President Mary Daly noted that easing price pressures strengthen the case for cutting rates, though timing remains a matter of debate. The dollar is weakening amid growing speculation of a Fed rate cut this year, with traders seeing a nearly 85% chance of easing in September, according to the CME Group’s FedWatch tool.
On the Swiss front, geopolitical tensions, political uncertainty in the US and Europe, and concerns about the global economic slowdown could boost safe-haven assets such as the Swiss Franc (CHF). However, speculation that the Swiss National Bank (SNB) will cut interest rates further could put some selling pressure on the CHF.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
