USD/CHF hesitates above 0.7800 despite weak Swiss Retail Sales data

USD/CHF wavers right above 0.7800 after dropping from 0.7920 highs on Thursday.
Swiss Retail Sales disappointed in March, although the impact on the CHF has been minimal.
The USD retreated across the board on Friday amid echoes of an alleged USD/JPY intervention.

Guillermo Alcala FXStreet

The US Dollar (USD) remains practically flat against the Swiss Franc (CHF) on Friday, wavering within a few pips above 0.7800, on track for a 0.35% weekly loss after dropping from highs above 0.7900 the previous day. The softer-than-expected Swiss Retail Sales data have failed to impact the pair, while an alleged intervention by Japanese authorities to stem Yen weakness has hit the Greenback across the board.

The Swiss Federal Statistics Office revealed on Friday that retail consumption year-on-year rose 0.5% in March, slightly above the 0.4% growth seen in February, but well short of the 1% increase forecasted by market analysts. On an annual basis, total retail sales have declined 0.1%.

Apart from that, an alleged intervention by Japanese authorities, consisting of selling US Dollars to support the Japanese Yen (JPY), has sent the US Dollar lower against its main currency peers on Friday.

The Japanese Ministry of Finance is supposed to have stepped into the Forex markets on Thursday, following comments by the Finance Minister, Satsuki Katayama, warning about immediate action. The USD/JPY depreciated around 2.4% on Thursday, sending the US Dollar lower across the board and triggering a more than 1% decline in the USD/CHF.

Japanese authorities are thought to have acted again on Friday, taking advantage of the thin trading volumes due to the May 1 Labour Day holiday. The USD/JPY lost 0.8% in a few seconds during the early European session in a move that reverberated across the market.

Economic Indicator

Real Retail Sales (YoY)

The Retail Sales data, released by the Swiss Federal Statistical Office on a monthly basis, measures the volume of goods sold by retailers in Switzerland. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the YoY reading comparing sales volumes in the reference month with the same month a year earlier. Generally, a high reading is seen as bullish for the Swiss Franc (CHF), while a low reading is seen as bearish.

GBP/USD advaces beyond 1.3450 after BoE decision, US Q2 GDP

GBP/USD gains positive momentum on Thursday, surpassing 1.3450 and trading at fresh multi-week highs. The Bank of England decided to maintain the benchmark rate unchanged at 3.75%. The MPC voted 6-3 to keep rates on hold, with the 3 dissenters favoring a rate hike. US Q2 GDP missing expectations helped the pair advance, while renewed US Dollar weakness across the FX board pushed the pair further up ahead of the monthly close.

EUR/USD confortable around 1.1530, highest in six weeks

The EUR/USD pair trades around 1.1530 in the American session on Thursday, reaching fresh six-week highs. The US Dollar is in sell-off mode, with multiple factors weighing on the American currency. Not only did the Federal Reserve vote divided to keep rates on hold on Wednesday, creating doubts about a September hike, but US Q2 GDP missed expectations. A suspected JPY intervention adds pressure on the Greenback.

Gold recovers the $4,100 level as US Dollar weakens further

Gold trades just above $4,100 amid a US Dollar sell-off. The Greenback enjoyed some near-term demand following Wednesday's post-FOMC downfall, but was unable to retain its gains. The preliminary estimate of the US Q2 GDP showed the economy grew at an annual rate of 1.5%, missing the market's expectations of 2.1%.

Bank of Japan set to keep interest rates unchanged after suspected Yen intervention

Investors are turning their attention to the Bank of Japan’s monetary policy announcement on Friday, after the Japanese Yen staged a dramatic rebound during Thursday's American session. The move came amid growing speculation that Japanese authorities intervened in the foreign exchange market after USD/JPY tumbled from above 163.00 to below 158.00 within minutes.

Aave to sunset Sonic, Aptos, zkSync, Scroll reserves, affecting $98 million in supply

Aave is planning to sunset 75 low-activity reserves across its decentralized finance protocol as part of a broader effort to reduce operational, technical and economic risks across its network of deployments.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.