Ella 
USD/CHF consolidated around 0.8890 in Asia on Wednesday, holding on to the previous day’s decline. However, the pair is under downward pressure, mainly driven by the strength of the US dollar. The U.S. 10-year Treasury bond yield rose 1.51% to 4.25%, supporting the dollar.
Investors will pay close attention to the data released in the market outlook. These data include the US ISM Services Purchasing Managers Index (PMI) for August and the US S&P Global Purchasing Managers Index. These data will provide valuable guidance on the current state of the US economy and may provide a clearer direction for USD/CHF.
On Tuesday, Reuters reported that U.S. Commerce Secretary Gina Raimondo did not expect the U.S. to revise the U.S. trade policy implemented under President Donald Trump until the Office of the U.S. Trade Representative (USTR) completes an ongoing review. tariffs on China. Renewed tensions in the U.S.-China trade war could boost the appeal of the traditional safe-haven Swiss franc (CHF), putting USD/CHF at risk.
The U.S. Dollar Index (DXY), which measures the dollar’s value against a basket of six other major currencies, is currently hovering around 104.70. Market participants appear increasingly convinced that the Federal Reserve will not raise interest rates at its upcoming September policy meeting.
In addition, U.S. factory orders fell to their lowest level since mid-2020 in July. On Tuesday, the data recorded -2.1%, below the market consensus of -0.1%, and the previous reading of 2.3%.
According to the CME Group’s FedWatch tool, there is a 93 percent chance the Fed will keep rates on hold. In addition, Fed Governor Christopher Waller emphasized in an interview with CNBC that interest rate decisions will depend on data. Waller’s statement on the data suggested that a favorable soft landing scenario played a role in supporting the strengthening of the US dollar (USD).
