• USD/CHF extends its downside around 0.8405 in Thursday’s early European session. 
• Fed’s dovish stance and escalating Middle East geopolitical tensions weigh on the pair. 
• The Swiss ZEW Survey Expectations came in at -3.4% in August vs. 9.4% prior. 

The USD/CHF pair remains under selling pressure near 0.8405 during the early European trading hours on Thursday. The dovish remarks from US Federal Reserve (Fed) officials continue to undermine the US Dollar (USD). 

The Fed Chair Jerome Powell said at the Fed’s annual retreat at Jackson Hole last week that “the time has come” for the US central bank to cut interest rates. According to the CME FedWatch Tool, financial markets are now fully priced in a 25 basis points (bps) rate cut in September, but the chance of a deeper rate cut stands at 36.5%. 

Meanwhile, San Francisco Fed president Mary Daly said on Monday that "the direction of change is down, and the time to adjust is now.” Traders widely expect the Fed to move ahead with a rate cut in September, which is likely to drag the Greenback lower in the near term. Minneapolis Fed Neel Kashkari noted it was appropriate to discuss potentially cutting interest rates from as early as September due to a weakening labor market.