USD/CHF treads water above 0.8000 as US Dollar holds ground due to market caution

• USD/CHF maintains its position as the US Dollar remains stable ahead of Producer Price Index data due on Wednesday.
• The Greenback may further appreciate as the June inflation report increased odds of the Fed maintaining current interest rate levels.
• The Swiss National Bank is expected to delay further monetary policy easing due to hot inflation data for June.

USD/CHF continues its winning streak for the third successive session, trading around 0.8020 during the Asian hours on Wednesday. The pair appreciates as the US Dollar (USD) remains stable, traders adopt caution ahead of the upcoming US Producer Price Index (PPI) later on Wednesday. The Fed Beige Book and Industrial Production will also be eyed.

Furthermore, the US Dollar may further appreciate following the June inflation report, which renewed concerns over the prospect of prolonged high interest rates from the Federal Reserve (Fed). The US Consumer Price Index (CPI) climbed 2.7% year-over-year in June, as expected. Core CPI came in at 2.9%, just below the 3.0% forecast but still notably above the Federal Reserve's 2% target.

The market sentiment eases a little following Trump's indication of willingness to further engage in trade discussions, indicating the possibility of negotiating with the European Union (EU) and other key trading partners.

However, Trump indicated on Tuesday is preparing to send tariff letters soon to smaller countries, including nations in Africa and the Caribbean, per Reuters. Trump further stated that his administration would likely set a tariff of "a little over 10%" for those countries.

Traders expect the Swiss National Bank (SNB) to delay further easing of monetary policy following the recent Swiss inflation report for June. SNB officials are expected to keep the interest rate unchanged at 0% in September, with many analysts projecting it will likely stay at that level through 2026.