USD/CHF moves little near 0.8200 as traders adopt caution ahead of US CPI data

• USD/CHF holds losses despite weakened safe-haven demand amid easing US-China tariff tensions.

• Traders adopt caution as the US CPI report may provide fresh impetus into the recent tariffs' impacts and inflationary trends.

• The recent Swiss CPI data has raised the odds of the SNB delivering a 25 basis point rate cut in June.

USD/CHF offers its recent gains registered in the previous session, trading around 0.8220 during the European hours on Wednesday. However, the pair may regain its ground as the Swiss Franc (CHF) may struggle due to weakened safe-haven demand, driven by the improved risk sentiment amid easing tariff tensions between the United States (US) and China.

US Commerce Secretary Howard Lutnick suggested, on Tuesday, potential resolutions with China and noted that both countries have reached a framework to implement the Geneva Consensus. While China’s Vice Commerce Minister Li Chenggang said that communication with the United States has been rational and candid, he will report on a framework to Chinese leaders. However, officials from both sides will seek approval from their leaders before implementation, according to Bloomberg.

US Treasury yields are holding steady as traders adopt caution ahead of the upcoming inflation data. The CPI report is expected to provide insight into the economic impact of recent tariffs and broader inflationary trends. 2-year and 10-year yields on US Treasury bonds are standing at 4.01% and 4.46%, respectively, at the time of writing.

In Switzerland, last week, Consumer Price Index (CPI) fell by 0.1% YoY in May, slipping below the Swiss National Bank’s (SNB) 0-2% target range and marking the first deflationary reading since March 2021. The softer inflation data has raised the odds of the Swiss National Bank (SNB) delivering a 25 basis point rate cut in the next meeting on June 19.