USD/CHF trims losses above 0.8950, Swiss CPI rises 0.3% MoM in May
- USD/CHF rebounds around 0.8970 in Tuesday’s early European session.
- The monthly Swiss CPI inflation rose 0.3% MoM in May and was below the consensus of 0.4%.
- The downbeat US ISM Manufacturing PMI raised the possibility of first rate cuts from Fed, weighing on the US Dollar.
The USD/CHF pair snaps the three-day losing streak around 0.8970 on Tuesday during the early European trading hours. The Swiss Franc (CHF) attracts some sellers after the cooler-than-expected Swiss inflation data.
Switzerland’s Consumer Price Index (CPI) rose 1.4% YoY in May, compared to the previous reading of 1.4%, the Swiss Federal Statistical Office reported on Tuesday. Meanwhile, the monthly CPI inflation rose 0.3% MoM in May and was below the market consensus of 0.4%. The cooler inflation data has triggered expectations for the Swiss National Bank (SNB) rate cut on June 28 and weighs on the CHF. Nonetheless, the downside of the CHF might be limited as SNB President Thomas Jordan hinted that the Swiss central bank could intervene in the foreign exchange markets in order to keep a lid on inflation.
On the other hand, the US PCE inflation remained steady in April, and the ISM Manufacturing PMI came in weaker than expected in May, raising the possibility of first rate cuts from the US Federal Reserve (Fed) in September. This, in turn, might exert some pressure on the USD against the CHF. Traders will shift their attention to the US employment data on Friday.
The US Nonfarm Payrolls (NFP) is projected to see 190,000 job additions in May, while the Unemployment Rate is estimated to remain steady at 3.9% in the same period. Any sign of weaker labour market data might further undermine the Greenback and create a headwind for the USD/CHF pair.