Read on to learn how the latest Swiss Consumer Price Index data has impacted the USD/CHF pair, along with key insights into the US Dollar’s performance ahead of crucial employment data releases.
- USD/CHF extends its losing streak following the release of Swiss Consumer Price Index data on Friday.
- Swiss CPI rose by 1.3% as expected to be consistent in July.
- The US Dollar loses ground ahead of employment data including Nonfarm Payrolls and Average Hourly Earnings.
The USD/CHF pair continues to see declines for the fourth consecutive session post the Swiss Consumer Price Index (CPI) data release. The Swiss Federal Statistical Office reported a 0.2% decline month-over-month in July, in line with expectations. Year-over-year inflation rose by 1.3% as anticipated, maintaining stability from the previous increase. Currently, the USD/CHF pair is trading around 0.8710 during the Asian session.
Swiss investors’ sentiment index dropped to 9.4 in June, down from June’s 17.5 readings, indicating a slight decline but still remaining positive, reflecting moderate optimism.
The weakening of the USD/CHF pair can be attributed to the subdued performance of the US Dollar due to the dovish sentiment surrounding the Federal Reserve’s policy outlook. Traders are fully expecting a 25-basis point rate cut by the Fed on September 18, as per the CME’s FedWatch Tool.
Recent manufacturing and labor market data have created a complex scenario with the US facing an economic slowdown and increased expectations of a Fed rate cut. If the economic downturn worsens, it could negatively impact market sentiment, making any rate cuts from the Fed ineffective.
Key data points to watch include the US ISM Manufacturing Purchasing Managers Index (PMI) dropping to an eight-month low of 46.8 in July, along with an increase in US Initial Jobless Claims for the week ended July 26. Traders are eagerly awaiting the July US Nonfarm Payrolls and Average Hourly Earnings data for insights into the US labor market.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency, known for its status as a safe-haven asset. Its value is influenced by market sentiment, economic health, and actions by the Swiss National Bank (SNB). The CHF’s fortunes are closely tied to the Euro due to Switzerland’s dependency on the Eurozone. The SNB aims for an inflation rate of less than 2% and adjusts policy rates accordingly. Economic data releases in Switzerland impact the CHF’s valuation, with stability, growth, and confidence being positive factors. Switzerland’s economy is linked to the Eurozone, with high correlation between EUR and CHF.