- USD/CHF has extended its decline to near 0.8950 amid a lack of DXY conviction for a recovery.
- The scrutiny of Tuesday’s preliminary US durable goods report indicates that fewer defense orders will impact economic data.
In the European session, the pair USD/CHF it fell further and approached 0.8950. The Swiss Franc has faced a sell-off amid weakness in the US Dollar Index (DXY). The Dollar Index has moved sideways after correcting from 103.16 as investors have begun to digest the consequences of the interest rate hike by global central banks.
S&P 500 futures posted nominal losses in London trading, reflecting a risk-off state as investors remain cautious ahead of US second-quarter corporate results. Investors expect weak numbers for bank stocks due to tight credit conditions and poor outlooks for technology stocks in a high interest rate environment.
The DXY oscillates in a tight range around 102.76 after a correction move. High volatility is expected following the release of US durable goods orders data (May). According to consensus, economic data contracted 1.0% versus an expansion of 1.1%. Durable goods orders excluding defense stalled against a 0.7% contraction.
The scrutiny of the advanced economic data indicates that a lower number of defense orders will have an impact on the economic indicator.
As for the Swiss franc, the Swiss National Bank raised interest rates by 25 basis points (bp) last week to 1.75% in order to keep inflation constrained below or around 2%. SNB Chairman Thomas J. Jordan believes that the consequences of an inflationary environment are greater than those of a country with low inflation. SNB Jordan kept the doors open to further interest rate hikes.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
