USD/CHF remains capped below 0.8070 ahead of US PPI, claims data

• The US Dollar's recovery attempt from 0.8025 lows has been contained at 0.8070
• Market volatility remains subdued ahead of the US PPI and Jobless Claims data
• Speculation about negative interest rates in Switzerland is weighing on the CHF.

The US Dollar bounced up against the Swiss Franc on Thursday. Still, upside attempts have been capped below 1.3870, leaving the pair in no man's land ahead of the release of US Jobless Claims and Producer Prices Index figures, due later today.

US Jobless Claims are expected to have increased by 2,000 for the third consecutive week, to 228,000 claims. These figures add to the evidence of a softening labour market, and endorse the views of Fed interest rate cuts in September.

Investor's enthusiasm, however, might be capped by US Producer Price Index numbers, out at the same time, and expected to have accelerated in July. The headline inflation is seen at 0.2% on the month and 2.5% year-on-year, up from 0% and 2.3% respectively in June.

Likewise, the Core CPI is seen accelerating 0.2% in July, after a flat performance in June, while yearly inflation is foreseen at 2.9%, up from 2.6% in the previous month. Investors are wary of a larger-than-expected increase in producer prices, which might cast a shadow ot September's Fed cut.

The Swiss Franc, on the other hand, remains on its back foot. The hefty trade tariffs introduced by US President Trump and the soft inflation figures seen recently suggest that the SNB might be forced to cut rates into negative territory to support economic growth.