Swiss Franc strengthens on inflation surprise and broad US Dollar weakness
USD/CHF comes under selling pressure on Thursday as a sharp rally in the Japanese Yen (JPY) weighs broadly on the US Dollar (USD), while the Swiss Franc (CHF) draws support from stronger-than-expected inflation and growth data.
On Thursday, the Swiss Franc strengthened as inflation and growth data surpassed expectations, while the US Dollar faced pressure from a sharp rally in the Japanese Yen. The pair traded around 0.8070, down 0.75% for the day, after reaching 0.8156 on Wednesday. Initial Jobless Claims increased to 206K in the week ending August 29, slightly above market forecasts, signaling potential layoffs before the upcoming Nonfarm Payrolls report.
The US Dollar Index traded near a one-week low at 99.26. Fed Governor Christopher Waller suggested signs of disinflation, keeping traders cautious about a September rate hike. Swiss inflation rose more than expected in August, with headline CPI increasing to 0.8% year-over-year, surpassing consensus expectations of 0.5% and the SNB's forecast of 0.6%.
Core CPI followed with a surprising 0.4% year-over-year increase, after four consecutive readings of 0.3%. Despite the upbeat data, Swiss Franc remains the weakest G10 currency this quarter.
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