The Swiss Franc has relinquished its earlier gains as the US Dollar recovers from its post-employment report lows. While Swiss inflation figures surpassed expectations, the underwhelming manufacturing data keeps the possibility of further Swiss National Bank (SNB) monetary easing on the table. Meanwhile, the Dollar is staging a rebound as market participants reassess Friday's unexpected employment statistics.

On Monday, the Swiss Franc emerged as the weakest performer among major currencies. The impact of better-than-anticipated inflation numbers was overshadowed by disappointing Swiss manufacturing data, while the US Dollar exhibited a mild upward trend following its decline at the end of last week.

According to the Consumer Price Index (CPI) figures released on Monday, inflation in Switzerland remained steady in July. The annual inflation rate accelerated slightly to 0.2% from 0.1% in the previous month, while the monthly CPI remained unchanged, contrary to expectations of a 0.2% decrease and following a 0.2% increase in the prior month.

These inflation figures may reduce the pressure on the SNB to implement negative interest rates. However, their influence on the Swiss Franc was minimal, as the SVME Purchasing Managers' Index (PMI) revealed an unexpected deterioration in manufacturing activity. This, combined with substantial tariffs on exports to the United States, has intensified concerns regarding the country's economic outlook.

Conversely, the US Dollar is recovering some ground after experiencing a sharp decline on Friday. The latest US employment report indicated that job creation in the United States has been significantly weaker than previously estimated over the past quarter, fueling speculation about a potential Federal Reserve rate reduction in September.

The data released on Friday showed that US payrolls increased by a net 73,000 in July, falling short of the projected 110,000. More significantly, figures for the preceding two months were revised downward by 258,000, while the Unemployment Rate edged up to 4.2% from 4.1%.