Ella 
USD/CHF closed higher for the third day in a row.
The U.S. ISM Services Purchasing Managers’ Index rose to 54.5 in August from the previous value of 52.7, which was higher than the expected value of 52.5.
The United States will extend China’s “Section 301” tariff exemption on some imported goods until December 31.
Market participants will focus on weekly U.S. jobless claims numbers and second-quarter unit labor costs.
In early Asian trading on Thursday, USD/CHF gained momentum around 0.8915. USD/CHF has attracted some bulls near its monthly high since July following the release of upbeat U.S. economic data. The U.S. dollar index (DXY), which also measures the greenback’s value against six other major currencies, hovered around 104.85 after retreating from a six-month high of 105.02.
Markets expect the Federal Reserve (Fed) to keep interest rates above 5% for an extended period of time. Federal Reserve (FED) Governor Christopher Waller (Christopher Waller) said that the Fed still has room to raise interest rates further, but economic data will determine whether the Fed needs to raise interest rates again and whether it has completed raising interest rates. Boston Fed President Susan Collins pointed out the risks of inappropriately limiting the bias of monetary policy and called for patient, cautious but deliberate policies.
The Institute for Supply Management (ISM) released a report on Wednesday that the U.S. ISM Services Purchasing Managers Index rose to 54.5 in August from the previous value of 52.7, higher than the expected value of 52.5. The gauge hit its highest level since February. Also, the final S&P World Aggregate index fell to 50.2 in August from 50.4 in July.
On the other hand, according to Reuters, the office of U.S. Trade Representative Catherine Day extended the “Section 301” tariff exemptions for 352 Chinese imports and 77 products related to the new crown epidemic that were originally scheduled to expire on September 30 to 12. March 31. This action will allow for further deliberation in the quadrennial statutory review. Still, tensions between the U.S. and China and renewed trade war tensions could be positive for the traditional safe-haven Swiss franc and bearish for USD/CHF.
In addition, the downturn in Swiss economic data this week also put pressure on the Swiss franc. That said, the Swiss economy remained stagnant in the second quarter. Switzerland’s second-quarter GDP fell 0.0% quarter-on-quarter, lower than the consensus forecast of 0.1% and the previous value of 0.3%. Swiss statistics office reported on Monday that the Swiss economy still grew at an annual rate of 0.5%, in line with expectations.
Later in the week, U.S. weekly initial jobless claims and unit labor costs for the second quarter will be released. These data will provide direction for USD/CHF. With no major Swiss economic data due later in the week, dollar volatility will be the main driver of USD/CHF.
