Ella 
USD/CHF fell below the 0.8800 mark on Thursday.
The market is currently pricing in a rate hike in November and a 40% probability of a rate cut in June 2024.
Weak Swiss data limited the CHF’s upside.
The annual rate of Swiss consumer price index and US non-farm payrolls data will be the focus of market attention.
In early Asian trading on Thursday, USD/CHF lost rebound momentum and remained below the 0.8800 mark. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback’s value against six other major currencies, has also lost momentum and is hovering around 103.00. At press time, USD/CHF was trading at 0.8772, down 0.14%.
The Automatic Data Processing company reported on Wednesday that the ADP employment change in the United States fell to 177,000 in August from 371,000 in July, below market expectations of 195,000. Additionally, the first estimate for second-quarter personal consumption expenditures (PCE) prices fell to 2.5% from 2.6% previously. Finally, the second estimate for annualized second-quarter gross domestic product (gross domestic product) fell to 2.1% from the first estimate of 2.4%.
Markets are now pricing in a rate hike in November and a rate cut in June 2024 at close to 40%, according to the CME FedWatch tool. Markets expect the U.S. Federal Reserve (FED) to end its tightening policy sooner than expected, although Federal Reserve (FED) Chairman Jerome Powell (Jerome Powell) said that possible further interest rate hikes will depend on upcoming data. The condition of the labor market may affect the short-term fluctuations of the dollar. Market participants are awaiting U.S. employment data due later this week, which could spark market volatility.
In the Swiss franc, weaker-than-expected Swiss data limited the upside of the Swiss franc against the dollar. On Wednesday, Switzerland’s August KOF leading indicator came in at 91.1 from 92.01 previously, below the consensus estimate of 91.5. Meanwhile, the ZEW expectations survey fell to -38.6 over the same period from -32.6 the previous month, below expectations for -31.3.
Aside from economic data, concerns over China’s economic woes could also favor the traditional safe-haven Swiss franc. Country Garden, China’s largest private property developer, warned on Wednesday it would default if its financial performance continued to deteriorate, Reuters reported.
Market participants will focus on the release of the U.S. core personal consumption expenditures price index (PCE), weekly jobless claims and the Chicago PMI later Thursday. Focus will shift to Friday’s annual Swiss consumer price index and the closely watched U.S. non-farm payrolls data. Traders will be looking for USD/CHF trade opportunities from these data which may cause market volatility.
