Swiss Franc weakens against US Dollar with US Inflation in focus

• The Swiss Franc trades lower against the US Dollar at around 0.8125 ahead of the US CPI data for July.
• Financial markets expect US inflation to have grown at a moderate pace.
• The US CPI data is expected to have a significant impact on the Fed's interest rate outlook.

The Swiss Franc (CHF) is down against its major currency peers during the European trading session on Wednesday. As of writing, USD/CHF trades 0.17% higher at around 0.8125. The Swiss Franc pair trades higher as the US Dollar edges up ahead of the United States (US) Consumer Price Index (CPI) data, which is scheduled to be published at 12:30 GMT.

At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades marginally higher to near 99.88.

Investors will closely track the US inflation data to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook.

US CPI in focus as softer core print could weigh on the Dollar

Analysts at ING note that consensus is “looking for a reasonably subdued set of numbers: 0.1% month-on-month for headline and 0.2% for core.” Such a profile would see the year-on-year rates “drop to 3.4% and 2.5% respectively – inching closer to the Fed's 2% inflation target.” ING highlights that “lower gasoline prices, broadening signs of rental deflation and soft wages” are expected to drive the softer readings.

Given that “the market looks to be expecting a softer price story today,” ING argues that investors would “probably need to see a 0.1% month-on-month read on core inflation – which some think is possible” to materially shift the policy narrative. In their view, “a soft number should drag market pricing of a September Fed rate hike away from a 50% probability in favour of no change,” while “a bullish steepening of the yield curve should see the Dollar soften – particularly against the procyclical currencies.”

This week, investors will also focus on the US Producer Price Index (PPI) data for July, which will be released on Thursday.

USD/CHF Technical Analysis

In the daily chart, USD/CHF trades at 0.8127. The pair holds a mildly bullish near-term bias as it advances above the 20-day exponential moving average (EMA) at 0.8104, keeping price supported after recovering from last week’s dip.

The Relative Strength Index (14) at 54.29 stays in neutral-to-positive territory, suggesting steady upside pressure rather than an overextended move.

On the downside, initial support is located at the 20-day EMA at 0.8104, where buyers have recently defended the pullback, and a break below this floor would hint at a deeper corrective phase. With no nearby technical resistances flagged by the current dataset, the pair appears free to probe higher levels, leaving momentum and broader market cues to guide whether the bullish tone can extend further.

(The technical analysis of this story was written with the help of an AI tool. Know more.)