USD/CHF oscillates in a narrow range around 0.8850 ahead of Swiss GDP

The USD/CHF pair remains confined between 0.8852-0.8862 range during the early Asian trading hours on Monday. Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against six other major currencies, holds above the 104.00 mark, while the US bond yields have a volatile session following the US economic data. The 2-year yield currently trades around 4.87% after falling to a three-week low of 4.76% and the 10-year bonds trade near 4.18%. At the time of writing, the USD/CHF is trading at 0.8855, losing 0.02% on the day.

Data released on Friday showed that Nonfarm Payrolls (NFP) for August in the US came in at 187,000, exceeding the estimate of 170,000 and July's reading of 157,000. The Unemployment Rate decreased considerably to 3.8%, compared to the market's estimate of 3.5% and the previous reading of 3.5%. The monthly Average Hourly Earnings increased by 0.2% instead of 0.3%. The US Dollar (USD) weakened across the board following the data released as traders anticipate that the Federal Reserve is likely to end the tightening cycle.

However, the Greenback reversed its direction after the US PMI data. That said, the US Manufacturing PMI came in at 47.6 versus 46.4 previously and above market expectations of 47.0.

On the other hand, the Swiss Real Retail Sales YoY for July came in at -2.2% versus 1.8% prior, the Swiss Federal Statistical Office reported last week. Additionally, the KOF Leading Indicator for August came in at 91.1 versus 92.01 prior and below the market consensus of 91.5. Finally, the ZEW Survey of Expectation for the same period fell to -38.6 from -32.6 the previous month and missed the expectation of -31.3. The weaker-than-expected Swiss data dragged the Swiss Franc (CHF) lower against its rivals.

However, The renewed trade war tension between the US and China might benefit the traditional safe-haven CHF and act as a headwind for USD/CHF. US Commerce Secretary Raimondo said that China is making the situation more difficult. He added that a lack of a predictable environment and a fair playing field are the primary drivers affecting US business in China. On the weekend, Chinese President Xi Jinping stated at the China International Fair for Trade in Services (CIFTIS) in Beijing that China will encourage the integrated development of high-end manufacturing and modern service industries, according to Reuters.

Looking ahead, market players will closely watch the Swiss Gross Domestic Product (GDP) for the second quarter. The quarterly and annual growth number is expected to grow 0.1% and 0.5%, respectively. On the US docket, the US ISM Services PMI for August will be released on Wednesday. These figures could give a clear direction for the USD/CHF pair.