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USD/CHF was trading weaker near 0.8945 during early European trading on Tuesday. The pair is still trading lower despite a slight rebound in the US dollar. U.S. retail sales will be in focus later Tuesday. In addition, Federal Reserve (Fed) official Adriana Kugler will also give a speech.
Growing expectations that the U.S. Federal Reserve (FED) will cut interest rates early this September have supported the pair’s decline, putting some selling pressure on the greenback. Traders currently see a 100% chance that the Fed funds rate will fall by at least 25 basis points when the Federal Open Market Committee (FOMC) meets in September.
Federal Reserve Chairman Jerome Powell said on Monday that recent inflation data have strengthened confidence that price increases are returning to target levels in a sustainable manner. Powell further said that the Fed does not expect to wait until inflation reaches 2% before taking action, indicating that a rate cut may not be far away.
In Switzerland, political uncertainty in the United States and the second round of French parliamentary elections last weekend provided some support for safe-haven currencies such as the Swiss franc. Donald Trump was shot in the ear during an assassination attempt at a rally in Butler, Pennsylvania. According to the British Broadcasting Corporation (BBC), one spectator was killed in the attack and two others were seriously injured. Trump was photographed with bleeding ears. Additionally, concerns about the French budget remain, helping to boost the Swiss franc.
