USD/CHF is struggling to return above 0.8200 despite the overall Dollar strength

The US Dollar remains capped below 0.8200 with the CHF buoyed by risk aversion.
Investors are wary of risk, awaiting Iran's response to this weekend's attack.
Later today, the US PMIs are expected to show that business activity growth moderated in June.

Guillermo Alcala FXStreet

The US Dollar is trading with moderate gains against the Swiss Franc on Monday, but remains trapped within the last few days' trading range, as the 0.8200 level keeps holding bulls for now.

The Greenback is appreciating against most of its main peers, but is failing to perform any significant advance against the safe-haven Swiss Franc, which is one of the strongest currencies today, amid a risk-averse market.

An attack from US planes and missiles that, according to President Trump, have devastated Iran’s nuclear program keeps investors on edge on Monday, awaiting a response from the Islamic Republic, which would escalate the conflict into a full-blown regional war.

Iranian officials have threatened to block the Strait of Hormuz, and an army spokesperson vowed severe consequences to the US earlier today.

In the macroeconomic front, US preliminary S&P Global PMIs are expected to show that business activity in the manufacturing and services sector eased in June, although still at levels consistent with moderate growth.

The highlights of the week will be the Fed Chair’s Semiannual Monetary Policy Report to Congress on Tuesday and Wednesday, and the US PCE prices Index on Friday, which will provide further clues on the bank’s monetary policy calendar.

Economic Indicator

S&P Global Composite PMI

The S&P Global Composite Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging US private-business activity in the manufacturing and services sector. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for USD.

EUR/USD stays well offered below 1.1800

The selling pressure on EUR/USD is picking up pace, with the pair slipping decisively below the key 1.1800 level and sliding to fresh two week lows as Wednesday’s session draws to a close. The move lower comes as the US Dollar finds renewed strength after the latest round of US data and the release of the FOMC Minutes. Next of note on the docket will be the US weekly Initial Jobless Claims.

GBP/USD extends decline as weak jobs data bolsters BoE rate cut bets

The Pound Sterling continued to backslide under sustained pressure on Wednesday, following through after the UK employment report on Tuesday showed a labour market deteriorating faster than expected.

Gold rises above $4,950 as US-Iran tensions boost safe-haven demand

Gold price holds positive ground near $4,985 during the early Asian session on Thursday. The precious metal recovers amid shifts in geopolitical sentiment, boosting safe-haven demand. Traders will keep an eye on the release of US Initial Jobless Claims, Pending Home Sales data, and the Fedspeak later on Thursday.

Australia unemployment rate set to edge up within overall strong labor market

The Australian monthly employment report is scheduled for release on Thursday at 00:30 GMT, and market participants anticipate a modest increase in jobs in January. The Australian Bureau of Statistics is expected to announce that the country added 20K new jobs in the month, while the Unemployment Rate is forecast at 4.2%, up from the 4.1% posted in December.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.