- USD/CHF surges above the 0.8800 barrier, bolstered by the upbeat US economic data.
- The People's Bank of China (PBOC) would arrange financial support to resolve local government debt worries.
- Investors will monitor the Swiss Trade data, Federal Reserve (Fed) Chairman Jerome Powell Speaks.
The USD/CHF pair hold positive ground around 0.8825 during the early Asian session on Monday. Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against six other major currencies, consolidates its gains around 103.40. Market players will keep an eye on the Swiss Trade data and the annual event at the Jackson Hole Symposium later this week.
The upbeat US data last week might convince the Federal Reserve (Fed) to tighten monetary policy further. Nonetheless, the minutes of the FOMC highlighted that inflation remained unacceptably high. The Fed officials see considerable inflationary concerns, and further rate rises may be required to bring inflation to the target. Officials from the Federal Reserve agreed that future rate decisions will be dependent on incoming data, but that they would be more cautious in the coming months. The strong US data and less dovish stance from Fed boosts the US Dollar higher for the fifth consecutive week and weigh on the Swiss Franc.
On the Swiss franc front, markets turn cautious following China’s economic woes. Evergrande, China's second-largest real estate company filed for bankruptcy in a US court under Chapter 15 last week. On Sunday, the People's Bank of China (PBOC) said that China would arrange financial support to resolve local government debt worries, according to Reuters. However, the lack of development about additional government support might weigh on the risk sentiment, which benefits the safe-haven Swiss Franc and act as a headwind for the USD/CHF pair.
Moving on, market players will keep an eye on the Swiss Trade data due on Tuesday. The key event of the week will be the Federal Reserve (Fed) Chairman Jerome Powell Speaks at the Jackson Hole Symposium on Friday. The event is scheduled for August 24 to 26. These remarks may have a greater influence than economic data and could give a clear direction to the USD/CHF pair. Also, the headline surrounding China’s debt crisis and real-estate woes remains in focus.
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 maintains its constructive bias above 0.6600
Further weakness in the US Dollar prompted AUD/USD and the rest of the risk-associated space to regain some balance and surpass once again the key barrier at 0.6600 the figure.
EUR/USD finds thin gains on Monday, but technicals weigh heavy ahead of US inflation updates
EUR/USD found slim upside on Monday, climbing from early bids near 1.0770 but bullish momentum remains limited with the pair struggling to break above the 1.0800 level.
Gold loses its bright amid mixed market mood
Gold prices retreated sharply on Monday from near $2,350 even though US Treasury yields declined, undermining appetite for the Greenback. Traders brace for a busy economic docket in the United States. The XAU/USD trades around $2,336, down 1% amid a risk-on impulse.
Ethereum trades horizontally as institutional whales dump heavily on Coinbase
Ethereum sustained its weekend sideways movement on Monday following a quiet market. However, institutional whales have been depositing the largest altcoin to Coinbase as ETH products also recorded $14.4 million in outflows last week.
Dow Jones Industrial Average stumbles on Monday after consumer inflation outlook rises
DJIA kicked off the new trading week softly higher before getting knocked back after the Federal Reserve Bank of New York revealed that consumer inflation expectations for the coming year accelerated to 3.3%.