SNB Rate Hike Expectations Ease as Swiss Franc Weakens Amid July Inflation Data

The Swiss franc weakened against major currencies after July's inflation data revealed a four-month low. Consumer price index (CPI) rose by [X]% year-on-year, down from [Y]%, marking the lowest reading since March.

On a monthly basis, prices declined by [Z]%, driven by lower costs for imported goods and a drop in fuel prices. Core inflation, excluding volatile items like food and energy, also eased, suggesting underlying price pressures are moderating.

The data aligns with the Swiss National Bank's (SNB) forecast of inflation staying within its 0-2% target range over the medium term. The SNB has raised rates several times to combat inflation, but this latest data may prompt a more cautious approach.

Analysts noted that the softer inflation print gives the SNB room to pause its tightening cycle, especially as the economy shows signs of slowing. The franc's weakening is significant for Swiss exporters, who have long struggled with the currency's strength.