USD/CHF stabilizes above 0.8900, remains resilient due to upbeat US Dollar

The USD/CHF pair shifted auction above the round-level resistance of 0.8900 on Thursday, inspired by strength in the US Dollar. The Swiss Franc asset is expected to extend upside as the US Dollar remains resilient due to the risk-off market mood.

S&P500 futures generated significant losses, carry forwarded sell-off propelled on Wednesday due to outperforming service sector. US ISM reported that Services PMI jumped significantly to 54.5 vs. expectations of 52.5 and July’s reading of 52.7. Also, the New Orders Index soared to 57.5 against the former reading of 55.0, which indicates an upbeat demand outlook.

The US Dollar Index (DXY) aims to climb above the crucial resistance of 105.00 as investors continue to pump money due to deepening global uncertainties. European and Asian economies are struggling to sustain economic prospects due to stubborn inflation and higher interest rates by their respective central banks.

Going forward, investors will focus on the April-June quarter Unit Labor Costs data. The economic data is seen unchanged at 1.6%. Stable wage growth would allow the Federal Reserve (Fed) to keep interest rates higher for a longer period. Currently, investors hope that the Fed is done with hiking interest rates due to cooling inflation and higher Unemployment Rate. Apart from the Q2 Unit Labor Costs, commentaries from various Fed policymakers are due, which will bring action to the US Dollar.

On the Swiss Franc front, the currency remained in action due to the release of the Swiss Gross Domestic Product (GDP) data for the April-June quarter. The Swiss economy remained stagnant in Q2 while investors anticipated a growth rate of 0.1%. In the January-March quarter, the Swiss economy grew by 0.3%.