Softer US Inflation Weighs on USD, Boosts CHF

The US Dollar has come under pressure after a softer-than-expected US inflation report. The Bureau of Labor Statistics reported that US wholesale costs for goods and services were flat in July, cooling more than anticipated.

This has shifted expectations regarding Federal Reserve policy, with markets now pricing in a 34.8% probability of a U.S. rate hike at the upcoming September meeting, down from 40%. The Swiss Franc, on the other hand, has strengthened as a result of this downward pressure on the US Dollar.

Swiss inflation dropped to 0.4% in July, its lowest level in four months, and is expected to remain subdued due to limited pass-through from higher energy prices linked to geopolitical tensions.