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USD/CHF is falling on US Dollar weakness as data out of the US paints a picture of a cooling US economy.  Recent services’ sector and labor-market data hint at a softness which could lead the Federal Reserve to enact Dollar-negative policies.  The Swiss Franc, however, remains fundamentally weak as the Swiss National Bank continues lowering interest rates in Switzerland.  USD/CHF reached a four-week high of 0.9050 on July 3 before proceeding to roll over and fall. It is currently trading in the 0.8980s. The decline has been put down to US Dollar weakness more than Swiss Franc (CHF) strength. A run of poor data from the US has made it more likely the Federal Reserve (Fed) will start to ease monetary policy – a move that would weaken the US Dollar.  USD/CHF 4-hour Chart  The poor data that has started weighing on the US Dollar includes the ISM Services PMI data for June which came out at 48.8 from 53.8 previously. This was significant because the services’ sector has been singled out as a key contributing factor to the stubbornly high inflation in the US economy, which in turn has prevented the US Federal Reserve (Fed) from lowering interest rates.  However, the weak ISM Services PMI data in June indicates the sector might be beginning to cool down which could further bring down inflation more generally and allow the Fed to cut interest rates. Although lower interest rates are positive for businesses because they reduce borrowing costs, they are negative for a currency because they make it less attractive to foreign investors as a place to park their capital. Thus the data weighed on the US Dollar and USD/CHF.  Signs of a softening labor market are also weighing on the US Dollar. The Nonfarm Payrolls (NFP) report for June has…

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Filed under: News - @ July 5, 2024 9:16 pm