The USD/CHF currency pair extended its decline to approximately 0.8460 during the early European session on Thursday. The drop comes as growing speculation about a potential larger interest rate cut by the US Federal Reserve (Fed) exerts downward pressure on the US Dollar (USD). Investors are now keenly awaiting several key economic reports, including the US ISM Services Purchasing Managers Index (PMI), the ADP private-sector employment report, and weekly Initial Jobless Claims, all set to be released ahead of the highly anticipated August Nonfarm Payrolls (NFP) report.
Recent weaker US economic data and a dovish Fed stance have broadly undermined the USD. The US Job Openings and Labor Turnover Survey, released on Wednesday, revealed a drop in available positions to 7.67 million in July from 7.91 million in June, falling short of the anticipated 8.1 million.
In related developments, Atlanta Fed President Raphael Bostic expressed willingness to begin cutting interest rates, despite inflation remaining above the 2% target. San Francisco Fed President Mary Daly echoed the sentiment, emphasizing the need for rate cuts to sustain a healthy labor market but noted that additional data, including Friday’s job market report and CPI, is necessary to gauge the appropriate magnitude of any rate adjustment.
On the Swiss front, Swiss inflation data for August showed a slower-than-expected rise, leading to speculation about a potential interest rate cut by the Swiss National Bank (SNB). Switzerland’s Consumer Price Index (CPI) increased by 1.1% year-on-year in August, down from 1.3% in the previous reading and below the market consensus of 1.2%. On a monthly basis, the CPI remained unchanged from July’s 0.2% decline, contrasting with the expected 0.1% increase.
Related Topics:
