USD/CHF extends its recovery and approaches 0.8100 after the Swiss CPI and PMI releases

• The Swiss Franc gives away gains as the US Dollar picks up from post-NFP lows.

• Swiss Inflation data beat expectations, but the weak PMI keeps hopes of further SNB easing alive.

• The Dollar corrects higher as investors sober up from Friday's Nonfarm Payrolls shock.

The Swiss Franc is the worst performer of the G8 currencies on Monday. Weak Swiss manufacturing data has offset the positive impact of the above-consensus inflation, while the US Dollar shows a mild positive tone following Friday’s sell-off.

Consumer inflation stalled in July, according to the CPI numbers released on Monday, which showed that the yearly inflation accelerated to 0.2% from 0.1% in the previous month, with the monthly CPI flat, against expectations of a 0.2% contraction, and following a 0.2% growth in the previous month.

These figures ease pressure on the SNB to cut rates below zero. Still, the impact on the Swiss Franc has been neglected, as the SVME PMI reported an unexpected deterioration in manufacturing activity, which, coupled with the hefty tariffs on exports to the US, increases concerns about the country’s economic outlook.

The US Dollar, on the other hand, is correcting higher following a sharp sell-off on Friday. US Nonfarm Payrolls data revealed that employment creation in the US has been much weaker than previously thought during the last three months, and boosted hopes of a Fed rate cut in September.

Data released on Friday showed that US payrolls saw a net increase of 73,000 in July, below the 110,000 forecast. More importantly, data from the previous two months was revised down by 258,000, while the Unemployment Rate increased to 4.2% from 4.1%.