Swiss Franc weakens as market caution lifts US Dollar | FXStreet

The Swiss franc weakened as caution in markets lifted the US dollar, with USD/CHF extending gains for a second straight day around 0.8110 in early European trading Tuesday. The move comes after Swiss inflation fell unexpectedly to a four-month low of 0.4% in July, below Swiss National Bank expectations. Meanwhile, the US dollar recovered after intraday losses tied to a sharp crude oil rally driven by heightened geopolitical tensions, which pushed Treasury yields higher. That dynamic increased fears the Federal Reserve could hike sooner than expected, even as the labor market cools. Investors are now watching this week’s inflation data for policy signals, with CME FedWatch pricing nearly 52% odds of a 25-basis-point September hike. OCBC analysts said core CPI would need to rise to at least 0.3% MoM to materially shift expectations.