Market Analysis

The USD/CHF pair recovers around 0.8970 on Tuesday during the early European trading hours, breaking a three-day losing streak. The Swiss Franc (CHF) faces selling pressure following weaker-than-expected Swiss inflation data.

According to the Swiss Federal Statistical Office, Switzerland's Consumer Price Index (CPI) increased by 1.4% year-over-year in May, unchanged from the previous reading of 1.4%. Monthly CPI inflation rose by 0.3% in May, below the market forecast of 0.4%. The subdued inflation data has heightened expectations of a Swiss National Bank (SNB) rate cut on June 28, weighing on the CHF. However, the downside for the CHF may be limited as SNB President Thomas Jordan suggested potential intervention in the foreign exchange market to control inflation.

In contrast, US PCE inflation remained stable in April, and the ISM Manufacturing PMI was weaker than anticipated in May, increasing the likelihood of the US Federal Reserve (Fed) implementing its first rate cuts in September. This development could put additional pressure on the USD against the CHF. Market participants are now focused on the upcoming US employment data, set to be released on Friday.

The US Nonfarm Payrolls (NFP) report is expected to show an increase of 190,000 jobs in May, with the Unemployment Rate projected to remain steady at 3.9%. Any indication of a weakening labor market could further undermine the USD and pose challenges for the USD/CHF pair.

Paraphrasing text from "Reuters" all rights reserved by the original author.