Swiss inflation data released on Thursday showed a notable slowdown, with the Consumer Price Index (CPI) registering 0% month-on-month growth in June, down from 0.2% in May and below the market consensus of 0.1% [1][4]. Year-on-year, Swiss CPI rose by 0.5%, matching expectations but easing from 0.6% in May [1][4]. The softer inflation figures have led to a pullback in the Swiss Franc (CHF) against the US Dollar (USD), with USD/CHF ticking up from intraday lows near 0.8080 and trading close to one-year highs around 0.8140, though still within the weekly range [1]. At the time of reporting, USD/CHF was 0.08% lower on the day at 0.8088, and the US Dollar was up 0.13% against the Swiss Franc on the day [4].
The subdued inflation print is seen as reinforcing expectations that the Swiss National Bank (SNB) will keep its benchmark interest rate unchanged at 0% for the remainder of 2026 and likely into 2027 [1]. Analysts note that the low SNB rate environment is a headwind for CHF rallies, especially as investors increase bets on potential Federal Reserve (Fed) rate hikes [1].
Meanwhile, market attention is shifting to the upcoming US Nonfarm Payrolls (NFP) report, with consensus estimates pointing to 110,000 new jobs added in June, down from 172,000 in May, and the unemployment rate expected to hold at 4.3% [1][2][3]. Average Hourly Earnings are forecast to rise 3.5% year-on-year, up from 3.4% in May, with a monthly increase of 0.3% [3]. Mitsubishi UFJ Bank senior analyst Akihiko Yokoo commented that a stronger-than-expected payrolls report could accelerate gains in the US Dollar, while a weaker print may undermine it [2].
Technical analysis across major USD pairs reflects a broadly bullish bias for the US Dollar. The US Dollar Index (DXY) is trading near 101.20, holding above key moving averages, with the 14-day RSI at 65 indicating firm momentum [2]. USD/CAD remains in a tight range near 1.4210, with overbought conditions but a constructive tone, and could extend gains if the consolidation breaks upwards [3].
Overall, the combination of soft Swiss inflation and anticipation of US labor market data is keeping the CHF under pressure and supporting the USD, with market participants closely watching for signals on future monetary policy moves from both the SNB and the Fed.
CONCLUSION
Softer-than-expected Swiss inflation data has weighed on the Swiss Franc and reinforced expectations for an extended SNB rate pause. With markets now focused on the US NFP report, the US Dollar maintains a bullish bias, and any surprises in US jobs data could drive further volatility across major currency pairs.