In early trading on Wednesday, the USD/CHF exchange rate hovered around 0.8480, extending its losses for the second consecutive session. Traders are adopting a cautious stance ahead of significant economic data releases this week, including the ISM Services PMI and Nonfarm Payrolls (NFP), which are anticipated to provide insights into the potential magnitude of a Federal Reserve rate cut this month. Additionally, attention will be on the Fed‘s Beige Book and JOLTS Job Openings later in the North American trading hours.
The US Dollar is experiencing depreciation, partly due to falling Treasury yields. The US Dollar Index (DXY), which gauges the USD against six major currencies, is trading near 101.60, with 2-year and 10-year US Treasury yields at 3.86% and 3.83%, respectively.
Despite this, the USD found some support following the release of the ISM Manufacturing PMI. The index rose slightly to 47.2 in August from 46.8 in July, though it fell short of the anticipated 47.5. This figure represents the 21st contraction in US manufacturing activity over the past 22 months.
In Switzerland, the Consumer Price Index (CPI) data released by the Swiss Federal Statistical Office on Tuesday showed a decline to 1.1% year-on-year in August, down from 1.3% in July and below the forecast of 1.2%. Month-on-month CPI remained unchanged at 0.0%, compared to a 0.1% increase in July.
Switzerland’s Gross Domestic Product (GDP) also showed positive signs, growing by 0.7% quarter-on-quarter in Q2, surpassing market expectations and improving from the 0.5% gain in the previous quarter. This represents the fastest economic growth since Q2 2022. On an annual basis, GDP rose by 1.8% for Q2, up from the previous 0.6% increase.
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