- USD/CHF faces selling pressure near 0.9100 as US Dollar drops on weak ISM Services PMI data.
- Fed’s hawkish guidance has dented Fed rate cut expectations for June.
- Swiss weak Retail Sales boost speculation for more rate cuts by the SNB.
The USD/CHF pair faces a sharp sell-off near the round-level resistance of 0.9100 as the United States Institute of Supply Management (ISM) has reported weak Services PMI data for March. The Services PMI, which represents the service sector that accounts for two-thirds of the US economy, falls to 51.4 from expectations of 52.7 and the prior reading of 52.6.
The US Dollar has faced significant selling pressure after weak US Services PMI data. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, drop to 104.40. The market sentiment improves as the S&P 500 has added significant gains after a subdued opening
Meanwhile, market expectations for the Federal Reserve (Fed) reducing interest rates from the June meeting have eased significantly. The CME FedWatch tool shows that traders are pricing in a 54% chance that the Fed will trim interest rates in June, down from 70% a week ago. 10-year US Treasury yields rise to 4.39%.
Market prospects for the Fed pivoting to rate cuts have eased due to hawkish guidance from Fed policymakers. Atlanta Fed Bank President Raphael Bostic told CNBC that he sees the central bank reducing interest rates only once this year as the economy is maintaining strong momentum.
This week, investors will keenly focus on the US Nonfarm Payrolls (NFP) data for March, which will be published on Friday.
On the Swiss Franc front, weak Real Retail Sales have boosted expectations of more rate cuts by the Swiss National Bank (SNB). The Retail Sales data, which represents consumer spending, surprisingly dropped by 0.2% while investors projected a growth of 0.4%. Deepening cost-of-living crisis would force SNB policymakers to consider more quantitative easing decisions.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD retargets the 0.6600 barrier and above
AUD/USD extended its positive streak for the sixth session in a row at the beginning of the week, managing to retest the transitory 100-day SMA near 0.6580 on the back of the solid performance of the commodity complex.
EUR/USD keeps the bullish bias above 1.0700
EUR/USD rapidly set aside Friday’s decline and regained strong upside traction in response to the marked retracement in the Greenback following the still-unconfirmed FX intervention by the Japanese MoF.
Gold advances for a third consecutive day
Gold fluctuates in a relatively tight channel above $2,330 on Monday. The benchmark 10-year US Treasury bond yield corrects lower and helps XAU/USD limit its losses ahead of this week's key Fed policy meeting.
Bitcoin price dips to $62K range despite growing international BTC validation via spot ETFs
Bitcoin (BTC) price closed down for four weeks in a row, based on the weekly chart, and could be on track for another red candle this week. The last time it did this was in the middle of the bear market when it fell by 42% within a span of nine weeks.
Japan intervention: Will it work?
Dear Japan Intervenes in the Yen for the first time since November 2022 Will it work? Have we seen a top in USDJPY? Let's go through the charts.