Swiss Franc Recovers as Strong ZEW Data Limits USD/CHF

Key Moments

CHF trims intraday losses as USD/CHF pulls back

The Swiss Franc (CHF) is weaker against the US Dollar (USD) on Wednesday, but it has recovered part of its earlier decline following stronger Swiss sentiment data. The USD/CHF pair is up about 0.2% on the session, yet it has retreated to levels below 0.8930 after touching intraday highs close to 0.8940. The move keeps the pair confined within the trading range established on Tuesday.

In a separate snapshot of price action, USD/CHF edges down below 0.8030 from session peaks near 0.8040, while remaining locked inside Tuesday’s range, underscoring subdued overall volatility.

Swiss ZEW expectations climb to nine-month peak

Fresh data from the German ZEW research center showed that the Swiss Economic Expectations Index improved for a second month in a row in August. The indicator advanced to 12.1 from 10.0 in July, marking its highest level since November of the previous year and signaling a more constructive outlook for the Swiss economy.

US PCE inflation report in focus

Market attention on Wednesday centers on the upcoming release of the US Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred gauge of inflation. The data are expected to underscore persistent price pressures, which could maintain the case for additional interest rate increases by the Fed in the months ahead.

Analysts at ING anticipate that the Dollar will remain largely stable around the core PCE release, stating that “a benign US core PCE print at 0.2% month-on-month should keep the dollar relatively steady today,” while the calmer market backdrop “could see some mild dollar losses.”

Oil price retreat eases demand for safe-haven USD

Beyond the US data calendar, Oil prices have declined about 8% from last week’s highs as Iran and Oman promote talks to reopen the Strait of Hormuz. This pullback has helped improve broader risk sentiment and has added pressure on the safe-haven US Dollar.

Key economic indicators overview

ZEW Survey – Expectations (Switzerland)

The ZEW Survey – Expectations, published by the Centre for European Economic Research, reflects business conditions, employment conditions, and additional factors influencing daily business activity in Switzerland. In general, higher readings are interpreted as supportive (bullish) for the CHF, while lower readings are seen as negative (bearish).

Core PCE Price Index (YoY – United States)

The Core Personal Consumption Expenditures (PCE) Price Index, published monthly by the US Bureau of Economic Analysis, tracks price changes for goods and services purchased by US consumers. It is the inflation measure preferred by the Federal Reserve. The year-on-year figure compares prices in the reference month with those in the same month a year earlier. The core measure excludes food and energy components, which are considered more volatile, to provide a clearer view of underlying price trends. Typically, a higher reading is supportive for the US Dollar, while a lower reading is negative for the currency.

Relevance for market participants

After releasing the GDP report, the US Bureau of Economic Analysis publishes the PCE Price Index data together with the monthly changes in Personal Spending and Personal Income. Members of the FOMC rely on the annual Core PCE Price Index, which excludes food and energy, as their primary inflation benchmark. A result that surpasses expectations can bolster the USD as it may point to a more hawkish tilt in the Fed’s forward guidance; a softer print can have the opposite effect.