USD/CHF surges above 0.8660 as US economy turns out surprisingly resilient
|- USD/CHF gallops above 0.8660 as upbeat US economic data supports interest rate hike by Fed in September.
- US GDP for the second quarter and Durable Goods Orders for June surprisingly beat expectations.
- More action is expected in the US Dollar Index as the core PCE Price Index for June will release on Friday.
The USD/CHF pair has recovered swiftly above the critical resistance of 0.8660 as the United States Gross Domestic Product (GDP) for the second quarter and Durable Goods Orders for June surprisingly beat expectations. Also, jobless claims registered by individuals for the first time were below consensus.
S&P500 opens on a bullish note as investors hope that the interest rate hike of 25 basis points (bps) by the Federal Reserve (Fed) announced on Wednesday was the last one in the current tightening cycle. Sentiment for US equities is positive while appeal for risk-sensitive currencies has faded.
The US Dollar Index (DXY) has printed a fresh two-week high at 101.71 as upbeat economic indicators have renewed hopes of one more interest rate hike from the Fed in its September meeting. Fed Chair Jerome Powell conveyed in his commentary that the interest rate decision for September will be data-dependent.
The upbeat expansion of GDP in the second quarter, robust demand for Durable Goods, and elongated tight labor market conditions indicate that the Fed could look for raising interest rates further. Economic resilience indicates that inflationary pressures could remain stubborn and more interest rates would be warranted.
More action is expected in the US Dollar Index as the core Personal Consumption Expenditure (PCE) Price Index for June will release on Friday at 12:00 GMT.
On the Swiss Franc front, more interest rates by the Swiss National Bank (SNB) are in the pipeline as inflation would take time to come below 2% steadily.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.