USD/CHF edges lower below 0.8950, US Retail Sales loom

• USD/CHF trades weaker around 0.8945 in Tuesday’s European session. 
• The rising bets on Fed rate cuts might cap the pair’s upside.
• The political uncertainty in the US and Europe might underpin the Swiss France for the time being. 

The USD/CHF pair trades on a softer note near 0.8945 on Tuesday during the early European session. The pair edges lower despite the modest rebound of Greenback. Later on Tuesday, the release of US Retail Sales will be in the spotlight. Also, the Federal Reserve’s (Fed) Adriana Kugler is scheduled to speak. 

The downtick of the pair is supported by the rising expectation, that US Fed would cut the interest rate sooner than earlier this September. This, in turn, exerts some selling pressure on the Greenback. Traders are now pricing in a 100% odds that the Fed funds rate will decline by at least 25 basis points when the Federal Open Market Committee (FOMC) meets in September. 

Fed Chair Jerome Powell said on Monday that the recent inflation data had added to confidence that price increases are returning to the target in a sustainable fashion. Powell further stated that the Fed doesn't expect to wait until inflation reaches 2% before acting, suggesting that rate cuts may not be far off. 

On the Swiss front, the political uncertainty in the US and the second round of France’s parliamentary elections last weekend provide some support to the safe-haven currency like the CHF. Donald Trump was shot in the ear during his rally in Butler, Pennsylvania in an assassination attempt. One spectator was killed in the attack, two others were critically injured, and Trump was pictured with blood spilling from his ear, per the BBC. Furthermore, the concern about France’s budget remains, which helps to boost the INR.