USD/CHF saw a rise in value as investors turned their focus to the US Dollar after strong PMI data was released in the United States. This shift in attention led to the pair trading around 0.9150 during European trading hours on Friday. The positive PMI data indicated growth in both the service and manufacturing sectors, boosting the hawkish sentiment surrounding the Federal Reserve.
The S&P Global US Composite PMI for May exceeded market expectations, reaching its highest level since April 2022. The Service PMI showed strong output growth, while the Manufacturing PMI also saw an increase. Federal Reserve Bank of Atlanta President Raphael Bostic added to the conversation by stating that the inflation outlook might not improve as quickly as anticipated, further influencing market sentiment.
Switzerland also saw some economic data release, with the Employment Level (QoQ) showing a slight decrease from the previous reading. The Swiss National Bank (SNB) is expected to maintain interest rates, as indicated by the 10-year Swiss government bond yield hovering around 0.76%. This could potentially lead to a stronger CHF and weaken the USD/CHF pair.
Investors have been monitoring signals from the Federal Reserve regarding potential interest rate cuts. The Swiss National Bank made a surprising move by lowering interest rates for the first time in nine years back in March. As the first major central bank to ease its monetary policy, this decision could have an impact on the CHF and USD/CHF pair.
Overall, the USD/CHF pair saw a rebound after recent losses, driven by strong US economic data and market sentiment surrounding the Federal Reserve. The focus on US Dollar as a safe-haven asset led to the pair trading higher during European trading hours. The Swiss Employment Level data showed a slight decline, while the Swiss National Bank is expected to maintain interest rates, potentially strengthening the CHF against the USD. Investors will continue to monitor central bank policies and economic indicators for further insights into the future direction of the USD/CHF pair.
