Swiss Franc Surges as Inflation Beats Forecasts and Dollar Weakness Persists
The Swiss Franc has strengthened on Thursday due to inflation surprises and broad US Dollar weakness. The USD/CHF pair is trading around 0.8070, down 0.75% on the day, after reaching a high of 0.8156 on Wednesday.
The US labor market data added to the selling pressure on the Greenback. Initial Jobless Claims increased to 206K in the week ending August 29, slightly above the market forecast of 205K and the previous reading of 204K.
US Dollar Index (DXY), which tracks the value of the US Dollar against a basket of six major currencies, trades around 99.26, near a one-week low. Federal Reserve Governor Christopher Waller's dovish comments keep traders cautious about a potential September rate hike.
Brown Brothers Harriman notes that Swiss inflation ran hot in August, with headline CPI rising more than expected to 0.8% y/y (consensus: 0.5% y/y) vs. 0.4% in July. However, the prevailing rate backdrop is an ongoing headwind for CHF.