USD/CHF remains flat, right above 0.8000 after Swiss data

The US Dollar consolidates losses against the Swiss Franc, after Wednesday's reversal from 0.8075.
Swiss GDP and KOF Leading Indicator data have confirmed a significant economic slowdown.
Hopes of Fed rate cuts in September are keeping US Dollar rallies limited.

Guillermo Alcala FXStreet

The US Dollar has found some support ahead of the 0.8000 psychological level against the Swiss Franc, after its reversal from 0.8075 highs on Wednesday. The pair is looking for direction at 0.8015 at the time of writing, with the immediate bearish trend despite the weak Swiss data seen on Thursday.

Swiss GDP figures for the second quarter revealed that the economy slowed to a 1.2% annual growth rate, down from 1.8% in the previous quarter and below the expected 1.4% reading.

Beyond that, the KOF Leading Indicator, which measures the future trends of Swiss economic activity, deteriorated to 97.4 in August, from 101.3 in July, also below the market consensus of a shallower decline, to 98.0.

Hopes of Fed cuts are keeping US Dollar rallies subdued

The USD/CHF pair failed to extend gains above 0.8075 for the third time this week and retreated on Wednesday after some dovish comments by Fed Williams sent the US Dollar lower across the board.

New York Fed president, John Williams, kept hopes of a September easing alive, affirming that every Fed meeting is “live, suggesting that a rate cut next month is a credible option.

The US Dollar, however, remains moving in a range, with investors awaiting Friday’s PCE Prices Index release for more clues about the Fed’s next move. The market consensus suggests a steady inflation reading, which, if confirmed, could solidify hopes for a September cut and potentially push the US Dollar lower.

Economic Indicator

Gross Domestic Product (YoY)

The Gross Domestic Product (GDP), released by the Swiss State Secretariat for Economic Affairs (SECO) on a quarterly basis, is a measure of the total value of all goods and services produced in Switzerland during a given period. The GDP is considered as the main measure of Swiss economic activity. The YoY reading compares economic activity in the reference quarter compared with the same quarter a year earlier. Generally, a high reading is seen as bullish for the Swiss Franc (CHF), while a low reading is seen as bearish.

Economic Indicator

KOF Leading Indicator

The KOF Swiss Leading Indicator is released by the Konjunkturforschungsstelle Swiss Institute for Business Cycle Research and it's a joint survey with leading indicator which measures future trends of the overall economic activity. It captures the movement of GDP growth and the economic trend in Switzerland. An optimistic view is considered as bullish for the CHF, whereas a pessimistic view is considered as bearish.

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