USD/CHF remains on track to post highest daily close in three weeks near 0.9050
|- USD/CHF reached its highest level since May 14 on Thursday.
- US Dollar Index posts strong daily gains after upbeat US data.
- 10-year US T-bond yield is rising more than 2%.
The USD/CHF pair broke out of its two-week range on Thursday and reached its highest level since May 14 at 0.9052 before going into a consolidation phase in the late US session. As of writing, the pair was up 0.78% on the day at 0.9046.
US T-bond yields jump ahead of NFP report
The broad-based USD strength in the second half of the day fueled USD/CHF's rally. The Automatic Data Processing (ADP) Research Institute reported on Thursday that the private sector employment in the US increased by 978,000 in May, compared to analysts' estimate of 650,000. Additionally, the weekly data published by the US Department of Labor showed that the Initial Jobless Claims declined to 385,000 from 405,000. Supported by the upbeat data, the US Dollar Index (DXY) started to edge higher.
Later in the session, the Institute for Supply Management (ISM) announced that the Services PMI improved to a new series high of 64 in May from 62.7 in April. More importantly, the Prices Paid Index component of the PMI report jumped to its strongest level in nearly 15 years at 80.6, reviving inflation concerns.
US Treasury bond yields surged higher and provided an additional boost to the USD. At the moment, the benchmark 10-year US T-bond yield is up 2.25% on the day and the DXY is up 0.67% at 90.50.
On Friday, the US Bureau of Labor Statistics will release the May jobs report. Investors expect Nonfarm Payrolls (NFP) to rise by 644,000 following April's disappointing print of 266,000.
Technical levels to watch for
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