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The USD/CHF pair posts modest gains around 0.8010 during the early European session on Wednesday. The Greenback strengthens against the Swiss Franc (CHF) after US inflation data that was broadly in line with estimates. The release of the US Retail Sales and Producer Price Index (PPI) reports will be in the spotlight later on Wednesday.

Data released by the US Bureau of Labor Statistics (BLS) on Tuesday showed that the US Consumer Price Index (CPI) rose  2.7% YoY in December. This figure followed 2.7% in November and matched the forecast. Meanwhile, core CPI, which excludes the so-called more volatile food and energy components, increased by 2.6% in December, versus a 2.7% prior rise. On a monthly basis, the headline and core CPI rose by 0.3% and 0.2%, respectively.

The US CPI inflation reports firm ‌expectations that the US Federal Reserve (Fed) will remain on hold later this month despite unprecedented pressure from the White House to lower interest rates. This, in turn, lifts the US Dollar (USD) against the CHF. Fed funds futures traders' pricing showed that an interest rate cut is not seen as likely until June. 

On the other hand, Fed uncertainty and geopolitical risks could boost traditional safe-haven currencies such as the CHF. US President Donald Trump on Sunday threatened Fed Chair Jerome Powell with a criminal indictment. Elsewhere, the Iranian government has cracked down on large-scale demonstrations, with hundreds of people reportedly dead. Trump has repeatedly threatened to intervene if the Islamic Republic kills protesters.

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