In today’s European session, the USD/CHF pair is showing signs of buying interest near the key support level of 0.8500. This comes as the US Dollar (USD) sees a slight uptick after hitting a new low in 2024. The US Dollar Index (DXY) has found some support after reaching a seven-month low around 101.00.
Investor sentiment is leaning towards riskier assets as the Federal Reserve (Fed) prepares to cut interest rates in September. S&P 500 futures are showing modest gains during European trading hours.
Speculation about a Fed rate cut next month has been reinforced by recent data showing weakening labor market conditions and easing price pressures. The US Bureau of Labor Statistics (BLS) reported a downward revision of 818K jobs for the year ending March 2024.
Looking ahead, market focus will be on the preliminary US S&P Global PMI data for August, as well as Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium. Powell’s speech on Friday could provide insights into the size of the upcoming rate cut.
On the other hand, the Swiss Franc’s performance will be influenced by expectations regarding the Swiss National Bank’s interest rate decisions. With inflation below target, the SNB is expected to continue its dovish monetary policy.
Analysis:
The USD/CHF pair is experiencing buying interest near 0.8500 as the US Dollar rebounds from recent lows. Market sentiment is bullish on risky assets, with expectations of a Fed rate cut in September. Weak labor market data and easing price pressures are driving speculation about the upcoming monetary policy decisions. Investors will closely monitor Powell’s speech for further guidance. Meanwhile, the Swiss Franc’s performance will be tied to the SNB’s interest rate decisions and inflation outlook.