Swiss Franc Weakens as Inflation Cools Amid Ongoing Diplomatic Uncertainty

The Swiss Franc (CHF) weakened as July inflation cooled to four-month lows, easing pressure on the currency. The Swiss Consumer Price Index (CPI) slowed to 0.4% in July, down from 0.5% in the previous month.

Strategists at Brown Brothers Harriman noted that 'Swiss July CPI stays muted,' underscoring the absence of inflationary pressure in the economy. They added that this means the Swiss National Bank (SNB) has 'plenty of room to keep rates at 0.00% for some time,' which is an ongoing drag for CHF.

The pair, USD/CHF, moved little after two days of gains, trading around 0.8100 during Asian hours on Tuesday. Price action in the pair remains muted as the US Dollar stabilizes amid ongoing diplomatic uncertainty.