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• USD/CHF loses ground, snapping the three-day winning streak around 0.8970 on Wednesday. 
• Fed’s Powell noted that the central bank is moving closer to feeling comfortable about interest rate cuts.
• Political uncertainties and geopolitical risks might boost the safe-haven asset like the CHF. 

The USD/CHF pair trims gains near 0.8970 during the early European session on Wednesday. The downward momentum of the pair is supported by the softer Greenback after Jerome Powell's Semiannual Monetary Policy Report on Wednesday.

The US Federal Reserve Chair Jerome Powell indicated the central bank is moving closer to feeling comfortable about interest rate cuts. He further stated that evidence of cooler inflation and that more "good data" could open the door to interest rate cuts.

The financial market is now pricing in 74% odds of a Fed rate cut in September, up from 71% last Friday, according to data from the CME FedWatch Tool. However, the Federal Open Market Committee (FOMC) members at their June meeting indicated just one cut this year. The expectation of a Fed rate cut might exert some selling pressure on the US Dollar (USD) in the near term.

Traders will focus on the weaker Greenback ahead of the US Consumer Price Index (CPI) inflation data on Thursday will be the highlights this week. The US CPI is estimated to show a rise of 3.1% YoY in June, compared to a 3.3% rise in May.  Core inflation is projected to remain steady at 3.4% YoY in June. 

On the Swiss front, the signs of cooler inflationary pressures in Switzerland might fuel the Swiss National Bank (SNB) to continue cutting interest rates further, which is likely to exert some selling pressure on the Swiss Franc (CHF). Nonetheless, the downside of CHF might be limited amid political uncertainties in France and geopolitical tensions in the Middle East.

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