Traders reduce bets on a September Fed rate increase after weak US retail sales and cooling inflation data.
The USD/CHF pair fell to 0.8120 in Asian trading, extending losses as the US Dollar weakened on dimming Fed rate hike prospects. Markets now assign a 35% probability to a September hike, down from 47% a month ago, following a decline in July retail sales and softer inflation readings.
US retail sales contracted for the first time in nine months, while July CPI data showed tame inflation. The Fed held rates steady at its last meeting, though three officials dissented in favor of tightening. Upcoming minutes may clarify internal divisions.
Switzerland’s economy grew 1.5% quarter-on-quarter in Q2 2026, supported by FX interventions to limit CHF strength. Swiss inflation slowed to 0.4% in July, reinforcing expectations the SNB will keep rates at 0% through 2027.