Ella 
USD/CHF ended lower for the fourth consecutive day following the release of Swiss Consumer Price Index (CPI) data on Friday. The Swiss Federal Statistics Office expects Swiss consumer prices to fall 0.2% month-on-month in July. Meanwhile, inflation rose 1.3% annually, in line with previous increases. USD/CHF was trading around 0.8710 during the Asian session.
On Wednesday, Switzerland’s investor sentiment index fell to 9.4 from 17.5 in June. Despite the decline, the index remains positive, indicating that the market outlook continues to remain moderately optimistic.
The downside in USD/CHF may be due to the tepid US Dollar (USD) due to dovish sentiment on the Federal Reserve’s (FED) policy outlook. The Chicago Mercantile Exchange’s FedWatch Tool shows traders fully expect the Fed to cut interest rates by 25 basis points on September 18.
In addition, the latest manufacturing and labor market data have created a complicated situation involving a slowdown in the U.S. economy and increasing expectations for a rate cut by the Federal Reserve. If the economic downturn is too severe, it could have a negative impact on market sentiment, making any interest rate cuts by the Fed moot.
The U.S. ISM Manufacturing Purchasing Managers’ Index (PMI) fell to 46.8 in July, an eight-month low, compared with the previous value of 48.5 and expectations of 48.8. U.S. jobless claims rose to 249,000 in the week ended July 26 from 235,000 the previous week, beating estimates of 236,000.
Traders are likely to keep a close eye on U.S. July non-farm payrolls and average hourly earnings data due later in the North American session to get a sense of the state of the U.S. labor market.
