US Dollar Strengthens on Robust Economic Data, Swiss Economy Shows Resilience

The US Dollar has maintained its strength in the market, bolstered by robust economic data. The July PCE price index accelerated to 0.2% month-on-month, beating the consensus estimate of 0.1%, while the annual rate climbed to 3.7%. This unexpected uptick has reinforced market bets that the Federal Reserve may deliver one final rate hike before year-end.

Market sentiment is also being influenced by shifting geopolitical and fiscal dynamics. Crude oil prices continue to decline following diplomatic progress in the Middle East, which has eased inflation anxieties. However, the US Treasury's plan to double bond buybacks has come under scrutiny, with billionaire investor Stanley Druckenmiller criticizing it as detrimental to market credibility.

The Swiss economy is showing resilience according to recent data. The ZEW Survey reported a rise in the Expectations index to 12.1 in August 2026, marking the second consecutive month of positive territory and the second-highest level since early 2025. This suggests a steadily improving domestic environment, despite economic sentiment being polarized.

Analysts at Commerzbank highlight a growing disconnect between market pricing and recent commentary around the SNB policy path. They note that market expectations are still pricing in a rate hike by mid-2027, which seems unlikely given the current inflationary trend.