USD/CHF remains on backfoot near 0.8750 despite a sharp recovery in the US Dollar.
The US Dollar recovers as Fed’s dovish guidance was already factored in by market participants.
The Swiss Franc exhibits strength ahead of July’s CPI release on Friday.
The USD/CHF pair hovers near more than four-month low around 0.8750 in Thursday’s European trading hours. The Swiss Franc asset remains weak even though the US Dollar (USD) has delivered a strong recovery move after plummeting to a fresh weekly low.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, jumps higher to near 104.35 after rebounding from a weekly low of 103.86.
In spite of a strong reversal move in the US Dollar, weakness in the major points to sheer strength in the Swiss Franc. The Swiss currency exhibits strength ahead of the Consumer Price Index (CPI) report for July, which will be published on Friday.
On month-on-month, price pressures are expected to have deflated by 0.2% after remaining unchanged in June, with annual figures growing steadily by 1.3%. The scenario in which price pressures rose at a slower pace would be favorable for bets supporting more rate cuts by the Swiss National Bank (SNB).
