Swiss Franc gains ground as US Dollar retreats despite hot inflation data
USD/CHF slips to two-week lows on Thursday as a sharp pullback in US Treasury yields weighs on the US Dollar (USD), overshadowing hotter-than-expected US producer inflation data.
The Swiss Franc gained strength against the US Dollar on Thursday as the US Dollar retreated despite hotter-than-expected US inflation data. The USD/CHF pair fell to two-week lows around 0.8286, down from its May 2025 high of 0.8395. Rising concerns over AI-related investments contributed to a sell-off in global equities, prompting investors to move into government bonds and drive down US Treasury yields.
The 10-year US Treasury yield dropped over 8 basis points to 5.06%, its lowest level in three weeks. Meanwhile, the US Dollar Index (DXY) retreated towards 102.00 after reaching 102.94 the previous day. Despite the hotter-than-expected US Producer Price Index (PPI) and Consumer Price Index (CPI) data, which indicated a stronger-than-forecast inflation, the Dollar's decline continued.
The Federal Reserve's (Fed) policy expectations remained unchanged, with traders anticipating a 90% chance of a rate hike by December. The Swiss Franc, benefiting from safe-haven flows, managed a stronger recovery than expected due to the Swiss National Bank's (SNB) zero policy rate, although its prospects may be limited given the relatively high threshold for an SNB rate hike.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
