The USD/CHF pair is experiencing continued selling pressure, reaching its lowest point since January 2021 in the early European session.
However, there has been a minor recovery in spot prices over the past hour, with the pair currently trading around the 0.8780-0.8785 range. Despite this, the pair remains down by only 0.10% for the day.
The ongoing decline in the US Dollar (USD) over the past week, leading to a two-month low, continues due to speculations surrounding the Federal Reserve’s (Fed) monetary policy tightening. Market participants are increasingly convinced that the US central bank will conclude its rate-hiking cycle after the expected lift-off in July.
This sentiment is reinforced by the downward movement of US Treasury bond yields. Consequently, the USD is under pressure, contributing to the downward trend of the USD/CHF pair.
Last week, the highly anticipated US employment report revealed the addition of the fewest jobs in 2-1/2 years in June, indicating a cooling labor market. Moreover, the monthly survey by the New York Fed unveiled a drop in one-year consumer inflation expectations to 3.8% in June, the lowest level since April 2021.
These developments fuel speculations of further deceleration in US consumer inflation, suggesting that the US central bank may adopt a less hawkish stance sooner rather than later.
As a result, market attention is focused on the upcoming release of the latest US consumer inflation figures during the early North American session. Prior to this key data, there has been a modest recovery in global risk sentiment, as evidenced by a generally positive tone in equity markets.
This has diminished the appeal of the safe-haven Swiss Franc (CHF) and helped mitigate losses for the USD/CHF pair, at least temporarily. Nevertheless, the fundamental backdrop favors bearish traders and indicates that the path of least resistance for spot prices remains downward.
Please continue to read new articles here about merchandise assessed by Waytrade.