Swiss Franc holds ground following domestic Producer and Import Prices data
USD/CHF depreciates after three days of gains, trading around 0.8130 during the European hours on Thursday. The pair holds losses as the Swiss Franc (CHF) remains stronger following Swiss Producer and Import Prices data for July.
The Swiss Franc (CHF) maintained its strength following the release of Swiss Producer and Import Prices data for July. The data showed a year-on-year decline of 2.1%, mirroring the pace of the previous month and extending a three-year deflationary trend. Monthly prices slipped by 0.1%, following a 0.3% decline in June. Analysts from OCBC suggested that the inflation backdrop remains favorable for the CHF, stating that near-term risks are limited.
They noted that recent CHF depreciation might lift imported inflation, but such an impact would likely take at least two more quarters to materialize. Meanwhile, domestic inflation remained subdued and below the midpoint of the Swiss National Bank's (SNB) 0-2% price stability range, further supporting the case for continued CHF weakness in the near term.
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