This week started with the Swiss Franc (CHF) experiencing some downward pressure against the US dollar (USD). The USD/CHF exchange rate dipped by 0.25%, settling around 0.8055 during European trading as the dollar gained ground, despite traders reassessing their forecasts for rate hikes by the Federal Reserve.
At the moment, the US Dollar Index (DXY), which gauges the dollar’s value relative to a group of six major currencies, was up by 0.15%, hovering around 101.00.
The likelihood of a Federal Reserve interest rate increase at least once before the end of September has decreased to 53.2%, down from 59.4% the previous week, as reported by the CME FedWatch tool.
This cautious outlook followed last Thursday’s US nonfarm payrolls data, which indicated a smaller increase in job creation for June than analysts had anticipated.
Traders are now looking ahead to the June Federal Open Market Committee (FOMC) minutes set to be released this Wednesday, hoping to gain further insights into the future of US interest rates.
On Monday, the focus will shift to the June US ISM Services Purchasing Managers’ Index (PMI), anticipated to be shared at 2:00 GMT. It’s projected to report a figure of 54.2, slightly lower than May’s reading of 54.5.
When it comes to the Swiss Franc (CHF), investors are keenly waiting for the unemployment rate data for June, which will be out at 08:00 GMT, with expectations pointing towards stability at 3%.
Economic Indicators
The Services Purchasing Managers’ Index (PMI), released monthly by the Institute of Supply Management (ISM), serves as a vital indicator of business activity in the US service sector, which constitutes a significant part of the economy. The index is compiled from a survey of supplier executives nationwide, reflecting changes in business conditions from the previous month. A reading over 50 signals growth in the service sector, interpreted as a positive sign for the USD, while a reading below 50 indicates a decline, which is viewed as negative for the dollar.
