- USD/CHF steadies below 0.8500 as the Fed looks set to cut interest rates in September.
- The US Dollar fails to recover strongly despite positive US Durable Goods Orders data for July.
- The employment level in Switzerland in the second quarter rose to 5.499 million.
The USD/CHF pair remains below the psychological resistance of 0.8500 in the American session on Monday. The Swiss Franc asset remains on the bearish trajectory as the Federal Reserve (Fed) interest rate cuts in September have been fully discounted by market participants, which has weighed on the US Dollar (USD) and enhanced the attractiveness of risk assets.
The S&P 500 opens on a bullish note on Monday. The Dollar Index (DXY), which tracks the value of the greenback against six major currencies, is up from a yearly low of 100.53. However, its short-term outlook remains bearish.
Investor confidence that the Fed will begin cutting interest rates in September increased after Fed Chair Jerome Powell’s speech at the Jackson Hole (JH) Symposium on Friday indicated that the central bank is prepared to pivot toward policy normalization. Jerome Powell said, “The time has come to tighten policy.” Fed officials are preparing to cut interest rates as they are concerned that downside risks to the US labor market have increased. Meanwhile, policymakers remain confident that inflation is on track to sustainably return to the desired 2% rate.
Meanwhile, positive US durable goods orders data for July failed to spur a strong recovery in the US Dollar. New durable goods orders that drive core inflation rose at a robust pace of 9.9% from estimates of 4%. In June, economic data contracted sharply by 6.9%.
On the Swiss Franc front, the employment level in the second quarter rose to 5.499 million from the previous release of 5.481 million. Although the labour market grew, it is unlikely to impact market speculation about the continuation of interest rate cuts by the Swiss National Bank (SNB) in September.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
