The USD/CHF currency pair is trading on a weaker note at approximately 0.8715 during the early European session on Friday, reflecting the softer performance of the US Dollar (USD). The USD Index (DXY), which gauges the value of the US Dollar against a basket of foreign currencies, is currently at 102.92, marking a 0.12% decline for the day.
Speculation surrounding a potential US Federal Reserve rate cut in September continues to put pressure on the Greenback. Despite this, traders are scaling back expectations for more aggressive rate reductions following positive US Initial Jobless Claims and Retail Sales data reported on Thursday. The CME FedWatch Tool indicates a nearly 80% probability of a rate cut in September and anticipates a total of 200 basis points in reductions over the next 12 months, contingent on future economic data.
In Switzerland, the Federal Statistical Office reported on Thursday that the Producer and Import Price Index remained stable in July 2024 compared to the previous month. The annual index decreased by 1.7%, slightly improving from a prior decline of 1.9%, aligning with market expectations.
Optimism about the US economic outlook is boosting investor sentiment and diminishing demand for the Swiss Franc (CHF) as a safe-haven currency. However, any developments related to economic uncertainty or geopolitical tensions in the Middle East could potentially strengthen the CHF and exert additional pressure on the USD/CHF pair.
Related Topics:
