Swiss consumer prices rose 0.4% year-on-year in July, the slowest pace since March, weighing on the Franc amid softer economic data.
The USD/CHF pair climbed to 0.8090 in European trading, extending gains for a second day as the Swiss Franc weakened. July’s inflation data showed consumer prices rising just 0.4% year-on-year, down from 0.5% in June and the slowest growth since March. Core inflation held steady at 0.3%, while monthly prices fell 0.1%, the first contraction in six months.
Switzerland’s SVME Manufacturing PMI also disappointed, dropping to 53.2 in July from 54.3 in June and missing forecasts of 55.0. Analysts at Nomura expect inflation to undershoot the Swiss National Bank’s Q3 forecast, reinforcing a dovish outlook for the Franc. However, broader USD weakness, driven by confirmed FX interventions by Japan and the U.S., may limit further upside for the pair.