- USD/CHF trades sideways around 0.8890 ahead of the US PMI releases.
- Fed Governor Christopher Waller stated that the interest rates decision would be data-driven.
- US Commerce Secretary Gina Raimondo expects no revisions to the US tariffs on China.
USD/CHF consolidates around 0.8890 during the Asian session on Wednesday, grappling to retreat the losses from the previous session. However, the pair experienced downward pressure, primarily driven by the strength of the US Dollar (USD). The yield on the 10-year US Treasury bond rose to 4.25%, up by 1.51%, which is contributing the support in underpinning the US Dollar (USD).
Investors will closely watch the upcoming data set to be released later in the day. This data includes the US ISM Services PMI for August and the US S&P Global PMIs. These releases will provide valuable insights into the current economic conditions in the United States and could provide a clearer direction for the USD/CHF currency pair.
On Tuesday, as per Reuters, US Commerce Secretary Gina Raimondo expects no revisions to the US tariffs on China that were implemented during President Donald Trump’s administration until the US Trade Representative’s (USTR) Office completes its ongoing review. This renewed tension in the trade war between the US and China could potentially boost the appeal of the traditional safe-haven Swiss Franc (CHF) and create headwinds for the USD/CHF currency pair.
US Dollar Index (DXY), which measures the value of the Greenback against the basket of six other major currencies, hovers around 104.70 at the time of writing. Market participants appear to be increasingly acknowledging the no-interest rate hike by the US Federal Reserve (Fed) during the upcoming September policy meeting.
Moreover, United States (US) Factory Orders for July dropped to their lowest levels since mid-2020. On Tuesday, the data showed a print of -2.1%, falling short of the market consensus of -0.1% figure, and swinging from the 2.3% growth seen in the previous month. The
According to the CME FedWatch Tool, there is a 93% probability that the interest rate will remain unchanged. Additionally, Fed Governor Christopher Waller, in an interview with CNBC, emphasized that the decision on interest rates would depend on the data. Waller’s statement regarding the data suggests a favorable soft-landing scenario has played a role in bolstering the strength of the US Dollar (USD).