The USD/CHF pair struggles to extend its over-a-week-long rally above the 11-week high of 0.8125 posted on Wednesday. During the late Asian trading session, the Swiss Franc pair trades marginally down to near 0.8095.
The rally in the Swiss Franc pair has hit a pause as the US Dollar (USD) retraces following the release of the United States (US) ADP Employment Change and ISM Services Purchasing Managers’ Index (PMI) data for October. At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks down to near 100.05. The USD index has corrected slightly after posting a fresh five-month high near 100.35 on Wednesday.
On Wednesday, the ADP Employment report showed that 42,000 fresh jobs were created in October, surpassing estimates of 25,000. In contrast, September saw employers lay off 29,000 workers. Meanwhile, the Services PMI came in at 52.4, beating estimates of 50.8 and the prior reading of 50.0.
Technically, upbeat US data boosts the US Dollar’s appeal. Therefore, the pullback in the US currency from its immediate high appears to be the outcome of profit-booking, assuming other factors remain constant.
Meanwhile, Federal Reserve (Fed) dovish expectations for the December meeting have eased further, as a majority of officials continue to express concerns over upside inflation risks. According to the CME FedWatch tool, the probability of the Fed cutting interest rates by 25 basis points (bps) to 3.50%-3.75% in the December meeting has eased to 62.5% from 94.4% seen before the monetary policy announcement on October 29.
On the Swiss Franc (CHF) front, Swiss National Bank (SNB) Chairman Martin Schlegel reiterated confidence on Tuesday that inflation will accelerate in the coming quarters. “Inflation should rise slightly in the next quarters, and interest rates are expected to remain on hold for a long time,” Schlegel stated. Such a scenario is typically favorable for the Swiss currency.
https://bitcoinethereumnews.com/finance/usd-chf-struggles-to-extend-rally-above-0-8125-outlook-remains-bullish/