Usdchf Trades Lower Ahead Of Pmi

last updated on

Usdchf Trades Lower Ahead Of Pmi

Usd/Chf Trades Lower Near 0.8900, Focus On Us Pmi

USD/CHF is trading lower on Wednesday, near 0.8900, as investors have shifted their focus to the upcoming US PMI data.

Additionally, the increased chances of at least 2 rate cuts this year (Sep & Dec) is yet another reason why the USD/CHF is on the back foot. Now, the US PMI data is awaited as it would provide insight into the health of the US manufacturing and services sector.

Two To Three Rate Cuts Expected From Us Fed

Right now, the market players are forecasting 2-3 rate cuts this year starting from September. So, when we look at the lackluster performance of greenback in the last few days, it all makes sense. According to the FedWatch Tool, there's now a 96% chance of rate cut in September 2024.

The upcoming US PMI will also have some serious implications for the USD/CHF. An improvement in the US manufacturing sector will help to cap the downside of the USD/CHF pair.

On Thursday, the US GDP data will also be released, followed by the PCE (June) on Friday. So, as far as the US Dollar is concerned, this trading week is jam-packed with data.

Yesterday's data showed that existing home sales in the USA have declined by 5.4% m/m during June. The last month's value was around 4.11 million, which has now gone down to 3.98 million.

On the Swiss front, the Swiss National Bank (SNB) is also highly likely to cut rates in September, just like its US counterpart. So, that's also something which is limiting the upside of the Swiss Franc (CHF).

According to Ballinger Group's analyst, the third rate cut from the SNB will be delivered in the next quarter. Furthermore, there's also a chance of a 4th rate cut in December 2024.

Meanwhile, the increase in political uncertainty continues to weigh on the US Dollar. At the same time, it has also boosted the demand for safe-haven assets such as the Swiss Franc.

Trending Stories