USD/CHF holds steady below 0.8000; eyes SNB Chairman Schlegel's speech, US inflation data

• USD/CHF lacks any firm intraday direction as traders seem reluctant ahead of US inflation data.
• Fed rate cut bets cap the overnight USD recovery and act as a headwind for the currency pair.
• Reviving safe-haven demand benefits the CHF and also contributes to keeping a lid on spot prices.

The USD/CHF pair struggles to capitalize on the previous day's goodish recovery move from the 0.7915 area, or the lowest level since July 23, and seesaws between tepid gains/minor losses during the Asian session on Wednesday. Spot prices remain below the 0.8000 psychological mark as traders now look forward to the crucial US inflation figures for some meaningful impetus.

The US Producer Price Index (PPI) is scheduled for release later during the North American session this Wednesday and will be followed by the US Consumer Price Index (CPI) on Thursday. Given that a 25-basis-point (bps) rate cut by the Federal Reserve (Fed) at next week's policy meeting is already priced in, the data will influence market expectations about the possibility of a jumbo interest rate cut. This, in turn, will play a key role on influencing the near-term US Dollar (USD) price dynamics and determining the next leg of a directional move for the USD/CHF pair.

In the meantime, the upbeat market mood is offset by rising geopolitical tensions and trade uncertainties. In fact, Israel carried out an air strike targeting Hamas leadership in Qatar's capital, Doha. Moreover, Poland placed its air defenses on high alert in response to Russia's heaviest air assaults on Ukraine in recent weeks. Meanwhile, US President Donald Trump has urged the European Union (EU) to impose 100% tariffs on Chinese and Indian goods to pressure Russian President Vladimir Putin, offering support to the safe-haven Swiss Franc (CHF) and capping the USD/CHF pair.

Traders on Wednesday will further take cues from Swiss National Bank (SNB) Governing Board Chairman Martin Schlegel's speech to grab short-term opportunities. Nevertheless, the aforementioned fundamental backdrop makes it prudent to wait for strong follow-through buying before confirming that spot prices have formed a near-term bottom and positioning for any meaningful appreciating move.