The USD/CHF pair remains steady above the 0.8660 mark during the Asian session, holding onto recent gains after bouncing back from the 0.8560 level following the release of US Unemployment Claims data and the possibility of another Fed rate increase after the July meeting.

According to the US Department of Labour (DOL) report on Thursday, weekly Initial Jobless claims declined to 228,000 for the week ending July 15, surpassing expectations of 242,000 and marking the lowest reading since mid-May, as compared to the previous 237,000.

In addition, the Philadelphia Federal Reserve Manufacturing Survey posted a figure of -13, lower than the consensus of -10. Meanwhile, June’s Existing sales recorded a contraction of 3.3% MoM, in contrast to the 0.2% gain seen previously.

The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, gained momentum after the data release, propelling it above the 100.00 area, and thus providing support to the USD/CHF pair.

Market participants are reassessing the likelihood of another Fed rate increase after the July meeting, leading to a rebound in the Greenback. The CME FedWatch Tool shows the odds for a rate hike during the November meeting have risen from 19.8% a week ago to 32.2%, indicating a shift in traders’ views on Fed monetary policy.

Meanwhile, the Swiss Trade Balance increased to 4,823 million from the previous 5,442 million, falling below the expected figure. Exports saw a jump from 23,879 million in May to 24,917 million, while imports rose from 18,438 million to 20,093 million.

Given the cautious sentiment surrounding the US-China relationship, the safe-haven Swiss Franc might benefit. Escalating trade war tensions could limit the upside potential for the US Dollar and create headwinds for the USD/CHF pair.

With no major data releases scheduled for Friday, market participants eagerly anticipate next week’s Federal Open Market Committee’s (FOMC) monetary policy meeting announcements, a crucial event that could significantly impact the dynamics of the US Dollar and set a clear direction for the USD/CHF pair.


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