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• USD/CHF trades on a stronger note near 0.8980 in Tuesday’s early European session. 
• The US Dollar edges lower due to a potential September rate cut from the Fed.  
• Political uncertainties both within Europe and globally, might support the CHF. 

The USD/CHF pair trades in positive territory for the second consecutive day around 0.8980 on Tuesday during the early European session. Meanwhile, the USD Index (DXY) consolidates near the 105.00 level ahead of Federal Reserve (Fed) Chair Jerome Powell's semi-annual monetary policy testimony on Tuesday. 

The rising expectation that the US Fed will start cutting the interest rate earlier than previously expected has dragged the Greenback lower. Fed Powell’s testimony might offer some hints about whether the possibility of a September rate cut has improved with the latest data. If Powell delivers hawkish comments, this might provide some support for the US Dollar (USD). Financial markets are now pricing in a nearly 76% chance of a Fed rate cut in September, up from 71% last Friday, according to the CME FedWatch tool. 

Market players will shift their attention to the US Consumer Price Index, which is due on Thursday. The US CPI is estimated to show an increase 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, political uncertainties in both within Europe and globally might boost a safe-haven currency like the Swiss Franc (CHF). However, the cooler inflationary pressures in Switzerland could prompt the Swiss National Bank (SNB) to continue cutting interest rates further. This, in turn, is likely to weigh on the CHF and create a tailwind for USD/CHF in the near term. 

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