In Friday’s European session, the USD/CHF pair experienced a rebound, nearing the 0.9050 level after encountering buying interest around 0.9020. The Swiss Franc asset found support as the US Dollar stabilized amidst a cautious market sentiment.
Market sentiment turned risk-averse ahead of the release of the United States core Personal Consumption Expenditure Price Index (PCE) data for April, scheduled for publication at 12:30 GMT. S&P 500 futures recorded losses during the European session, contributing to the slight rebound of the US Dollar Index (DXY) to 104.85.
In addition to the tepid performance of US equities, Asian markets faced pressure following China’s disappointing National Bureau of Statistics (NBS) Manufacturing and Non-Manufacturing PMI for May, which fell short of estimates. This development has raised concerns regarding the global economic outlook.
The core PCE Inflation data, considered the Federal Reserve’s (Fed) preferred inflation gauge, is anticipated to show steady growth of 0.3% on a monthly basis and 2.8% annually. Insights from this inflation data will provide indications of whether the Fed will proceed with interest rate adjustments from their current levels, with speculation mounting on a potential start in September.
Presently, traders exhibit mixed sentiments regarding the likelihood of the central bank returning to the policy normalization process in September, as indicated by the CME FedWatch tool.
Meanwhile, despite a slight decline against the US Dollar, the Swiss Franc demonstrated strength on Thursday following the release of better-than-expected Swiss Q1 Gross Domestic Product (GDP) data. The Swiss economy expanded by 1.5%, surpassing estimates and the previous release of 1.3%. This outcome has heightened upside risks to inflation, potentially prompting the Swiss National Bank (SNB) to reconsider subsequent rate-cut plans.
Related Topics:
