• USD/CHF gathers strength near 0.8525 in Tuesday’s early European session. 
• The Swiss CPI rose 1.1% YoY in August; the Swiss economy grew 0.7% YoY in Q2. 
• Higher US Treasury bond yields underpin the Greenback, but firmer Fed rate cut bets might cap its upside. 

The USD/CHF pair extends its upside amid the firmer US Dollar (USD) around 0.8525 during the early European trading hours on Tuesday. The Swiss inflation was softer than expected in August, but the economy grew stronger than estimated. Investors brace for the US ISM Manufacturing PMI data, which is due later on Tuesday. 

Data released by the Swiss Federal Statistical Office on Tuesday showed that the country’s Consumer Price Index (CPI) rose 1.1% YoY in August, compared to the previous reading of 1.3%. This figure was below the market consensus of 1.2%. On a monthly basis, the CPI inflation remains unchanged in August from a decline of 0.2% in July, softer than the expectation of a 0.1% increase. 

Furthermore, Switzerland's economy grew at a faster rate than expected in the second quarter (Q2). The Swiss Gross Domestic Product (GDP) expanded by 0.7% QoQ, compared to 0.5% expansion in the previous reading, stronger than the estimation of 0.5%. However, the upbeat Swiss GDP growth data fails to boost the Swiss Franc (CHF) in an immediate reaction to the mixed readings.