The Swiss franc's inflation rate in August fell from 1.3% the previous month to 1.1%, lower than the expected 1.2%. In April and May, the year-on-year price increase rose to 1.4%, but then began to decline, falling by 0.2% in the past three months.

(Swiss CPI trend chart)

The Swiss National Bank lowered its benchmark interest rates twice in March and June. However, further slowing price growth and the appreciation of the Swiss franc have paved the way for more monetary easing.

The US dollar against the Swiss franc has returned to around the early year low of 0.8500. Against the backdrop of rising expectations of a Fed rate cut, the currency has fallen back to that range as it did then and now. Meanwhile, Switzerland's earlier loose policy did not significantly weaken the Swiss franc.

(USD/CHF weekly chart)

The strength of the Swiss franc may encourage monetary authorities to take more aggressive measures to curb the appreciation of the Swiss franc, including issuing warnings or actual exchange rate interventions. The Swiss franc only fell below its current level in 2011.

An excessively strong Swiss franc can reduce export competitiveness and harm the Swiss economy, which could be a problem for Switzerland's open economy.

At 04:30 Beijing time, the USD/CHF exchange rate was 0.8505, with a decrease of 0.06%.