- USD/CHF hits early June highs but retreats to 0.8990.
- The USD is bearish due to disappointing PCE data for May.
- Market odds of a September interest rate cut by the Fed have increased slightly.
On Friday, the pair USD/CHF was unable to maintain its momentum, depreciating due to weak Personal Consumption Expenditure (PCE) Price Index figures for May. With no significant news or data coming out of Switzerland, the pair has been mainly influenced by US data as investors place their bets on the next moves of the Federal Reserve (Fed).
Friday’s highlight was the disappointing US PCE data for May. PCE inflation fell in annual terms to 2.6% in May, in line with market expectations, from 2.7% in April. On a monthly basis, the PCE Price Index remained unchanged in May. In reaction, the weak data helped raise the probability of a September interest rate cut by the Fed to nearly 66%, according to the CME FedWatch tool.
However, Federal Reserve officials continue to warn about the possibility of an interest rate cut, with Bostic advising that he sees only one cut for this year in the fourth quarter, and adding that he has forecast four cuts by 2025 but questions the reliability of such long-term projections. As the Fed remains data-dependent, eyes will turn to June jobs data for markets to get further guidance on the U.S. economy.
Focus on the Swiss economic calendar remains minimal, with attention diverted to the first round of French legislative elections on Sunday, which could induce some movement in eurozone currencies.
USD/CHF technical analysis
Looking at the technical outlook, the pair’s positioning looks promising. The pair has solidified its position above the 20-, 100-, and 200-day Simple Moving Averages (SMAs), which lends a positive outlook for the future. Despite some bearish currents, the pair has maintained a four-day winning streak and has gained nearly 1.50% over the past seven sessions. The buyers’ focus should be on holding the recently gained 100-day SMA at 0.8980.
USD/CHF daily chart
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.
