- The USD/CHF extended its decline despite soft CPI figures from Switzerland.
- US ADP employment report and ISM Services PMI data for June from the US came in weaker than expected which pressures down the pair.
- Due to softening inflation, the SNB might embrace further cuts.
In Thursday's session, the USD/CHF pair slightly declined, with markets showing a less enthusiastic attitude towards the USD after weak data outcomes. The key movers are the disappointing US ISM Services PMI for June, which indicated a contraction in the US service sector reported on Wednesday. In the European session, the Swiss inflation figures came in soft.
The center of attention on Wednesday was the weak ADP Employment report for June, with private sector jobs increasing by 150K compared to the revised forecast of 160K. Additionally, the ISM Services PMI considerably underperformed, dropping to 48.8 from 53.8 in May and missing the market expectation of 52.5. Subsequently, markets grew more confident of a September cut from the Federal Reserve (Fed) which weighed on the USD.
Anticipation grows for the US labor market figures, notably the Nonfarm Payrolls for June and Unemployment and wage inflation figures due on Friday. These figures have drawn enhanced scrutiny due to growing concerns among Fed officials about the health of the labor market and may shift the expectations of the timing of the easing cycle.
On the Swiss front, the June Consumer Price Index (CPI) announced on Thursday showed a decline to 1.3% YoY vs the 1.4% YoY expected. The Core slightly declined to 1.1% the 1.2% expected. The lower inflation might give scope to the SNB to ease further. Hence, market odds for a September interest-rate cut by the SNB exceeded 50%.
USD/CHF technical analysis
The technical outlook turned somewhat negative in the short term. The currency pair cut a promising six-day streak, with indicators including the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) losing momentum. Main supports lie at the 100-day Simple Moving Average (SMA) at 0.8985, followed by the 20-day SMA at 0.8950. The immediate target for the buyers remains at 0.9040.
USD/CHF daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
GBP/USD tepid as UK election results poised to match early polls, US NFP looms ahead
GBP/USD traded in a tight range on Thursday as Cable traders await final results from the UK’s Parliamentary Election, and markets gear up for a fresh round of US Nonfarm Payrolls slated for Friday. US markets were dark on Thursday, crimping overall market flows during the American trading window, but are slated to return on Friday.
AUD/USD holds its ground, markets eye key NFPs from the US from June
The Australian Dollar held its ground against the USD, maintaining itself in highs since January. This is despite the weaker-than-expected Trade Surplus figures reported during the Asian session as the USD remains weak following Wednesday’s set of soft economic figures reported.
Gold price consolidates amid choppy trading ahead US NFP
Gold price edge up 0.15% amid thin trading on US Independence Day. XAU/USD reached a two-week high of $2,365 Wednesday, driven by weak US jobs data and heightened Fed rate cut expectations. Traders shift focus to Friday's NFP report.
Ethereum bears gain momentum after ETH breaches key support level
Ethereum is down more than 5% on Thursday following the US SEC failure to approve ETH ETF issuers' S-1 drafts. Meanwhile, the recent decline has strengthened the bearish outlook after ETH moved below a key support level, sparking $90 million in long liquidations.
Labour wins a landslide, as Pound is unconcerned by Starmer government
What a difference five years makes, Labour have turned themselves around and are on course to win 410 seats and a 170-seat majority, according to the exit polls conducted by the main UK broadcasters.