USD/CHF holds its losses for the fourth successive session following the Swiss Consumer Price Index (CPI) data released on Friday. Swiss Federal Statistical Office declined by 0.2% month-over-month in July, as expected. Meanwhile, inflation year-over-year rose by 1.3% as expected, remaining consistent as compared to the previous rise. The USD/CHF pair trades around 0.8710 during the Asian session.
On Wednesday, the Swiss investors' sentiment index dropped to 9.4 in June, from June's 17.5 readings. Despite the decline, the index remains in positive territory, suggesting that the outlook continues to be moderately optimistic.
The downside of the USD/CHF pair could be attributed to the tepid US Dollar (USD) due to the dovish sentiment surrounding the Federal Reserve's (Fed) policy outlook. The CME's FedWatch Tool shows that traders are fully anticipating a 25-basis point rate cut on September 18.
Additionally, the latest manufacturing and labor market data have erected a complex situation involving an economic slowdown in the United States (US) and increased expectations for a Federal Reserve rate cut. If the economic downturn becomes too severe, it could negatively impact market sentiment, rendering any rate cuts from the Fed irrelevant.
US ISM Manufacturing Purchasing Managers Index (PMI) tumbled to an eight-month low of 46.8 in July, compared to the previous 48.5 reading and the forecasted move up to 48.8. US Initial Jobless Claims for the week ended July 26 rose to 249K from the previous week's 235K, exceeding the forecast uptick to 236K.
Traders are likely to closely watch the upcoming July US Nonfarm Payrolls and Average Hourly Earnings data, set to be released later in the North American session, for insights into the US labor market.
Source : FX Street
