Anna 
The USD/CHF pair continued its downtrend for the fourth consecutive day on Monday, hovering around the 0.9050 level during European trading hours. The decline in the pair can be attributed to the persistent weakness in the US Dollar (USD), driven by revived expectations of potential interest rate cuts by the US Federal Reserve (Fed) later this year. This sentiment stems from the softer-than-expected US jobs data released last Friday.
The latest US Nonfarm Payrolls report for April revealed that the US economy added 175,000 new jobs, falling short of the estimated 243,000 and signaling a notable slowdown compared to March’s addition of 315,000 jobs. Additionally, Average Hourly Earnings (YoY) rose by 3.9% in April, slightly below the anticipated 4.0% and the prior figure of 4.1%. Monthly growth in earnings stood at 0.2%, missing the expected 0.3%.
Market expectations have shifted, with the Federal Reserve (Fed) now anticipated to implement its first rate cut as early as September, moving ahead of previous forecasts that pointed to November. According to the CME FedWatch Tool, the probability of a 25 basis points (bps) rate reduction during the Fed’s September meeting has increased to 48.8%, up from 43.8% just a week ago.
On the Swiss front, recent data released on Thursday showed that annual inflation in Switzerland accelerated more rapidly than anticipated in April. The Swiss Consumer Price Index (CPI) rose to 1.4% year-on-year, up from the previous increase of 1.0% in March, surpassing market expectations of 1.1%. This unexpected acceleration has provided support to the Swiss Franc (CHF).
Looking ahead, traders are expected to closely monitor a speech by Swiss National Bank (SNB) Chairman Thomas Jordan at the SNB’s Project Helvetia III during the BIS Innovation Summit 2024 in Basel. Jordan’s remarks could offer fresh insights into the Swiss economy and the SNB’s policy direction, potentially influencing the direction of the USD/CHF pair in the near term.
