USD/CHF advances towards a six-week high near 0.9860 ahead of US ISM Services PMI
|- USD/CHF is marching towards a six-week high to near 0.9860 amid an upbeat DXY.
- In this week’s key event, US ISM Services PMI data is seen lower at 54.9 vs. 56.7.
- Swiss Franc CPI has escalated by 10 bps to 3.5%.
The USD/CHF pair is scaling higher gradually towards the six-week high near 0.9860 in the early Tokyo session. On a broader note, the asset has turned sideways after remaining in the grip of bulls for the past month. The major is oscillating in a 0.9783-0.9859 range and is expected to deliver a vertical upside move ahead.
The asset has strengthened significantly after the release of an upbeat US Nonfarm Payrolls (NFP) on Friday. As the US economy has added 315k jobs in August against expectations of 300k, odds of a third consecutive 75 basis points (bps) rate hike by the Federal Reserve (Fed) have soared. Fed policymakers are facing the harsh reality of delayed response on higher inflation. However, the spree of decent labor additions in the US economy is trimming troubles for the Fed.
Meanwhile, the US dollar index (DXY) has printed a fresh two-decade high at 110.03 despite an escalation in the Unemployment Rate. The jobless rate landed at 3.7% higher than the expectation and the prior release of 3.5%. Going forward, investors will focus on the US ISM Services PMI data, which will release on Tuesday. The economic data is expected to decline to 54.9 against the prior release of 56.7. Investors should be informed that the US markets will remain closed on Monday on account of Labor Day.
Meanwhile, less-than-expected Real Retail Sales data have weakened the Swiss franc. The economic data landed at 2.6%, lower than the consensus of 3.3% but remained higher than the prior release of 0.7%. Also, the Consumer Price Index (CPI) has improved to 3.5% against expectations and the former print of 3.4% on an annual basis.
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