USD/CHF loses traction near the 0.8730 mark amid USD weakness
- USD/CHF loses momentum around 0.8730, down 0.24% in the early Asian trading hours.
- The renewed trade war tensions between the US-China might exert pressure on USD/CHF.
- Investors await the US ADP employment, the Swiss CPI y/y.
The USD/CHF pair snaps a four-day winning streak near 0.8730 during the early Asian session on Wednesday. Market participants await the US ADP employment report due in the American session for some hints for Friday’s Nonfarm Payrolls. Meanwhile, the US Dollar Index (DXY), a measure of the value of the Greenback against six other major currencies, loses momentum to 101.95 after retreating from the 102.45 mark.
On Tuesday, the US Bureau of Labour Statistics (BLS) reported that JOLTS Job Openings came in at 9.58 million in June. This reading followed May’s 9.82 million openings and was below the market consensus of 9.62 million. Meanwhile, the ISM Manufacturing PMI increased to 46.4 from 46 in July, but was below the expectation of 46.8.
The renewed trade war tensions between the US-China might undermine the US Dollar and act as a headwind for the USD/CHF pair. China’s authorities announced export restrictions on some drones and drone-related equipment to the US on Monday, citing “national security and interests”. The restriction will go into effect on September 1, according to the commerce ministry. It’s worth noting that the US is China’s biggest export market for drones.
Additionally, US President Joe Biden plans to sign an executive order curbing US technology investments in China by mid-August. Investors will keep an eye on the developments surrounding the US-China relationship. The tension between the world’s two largest economies could benefit the traditional safe-haven Swiss Franc (CHF) and cap the upside for USD/CHF.
About the data, the Swiss ZEW Survey Expectations data by the Centre for European Economic Research reported that the figure came in at -32.6 versus -30.8 prior and a worse-than-expected 31.1. While Swiss Retail Sales for June YoY came in at 1.8% versus a 0.9% decline in May.
Moving on, the Swiss SECO Consumer Climate, Manufacturing PMI, and Consumer Price Index (CPI) y/y could offer clues about the Swiss franc’s movement. Market players will also monitor the release of the US ADP employment report later in the day ahead of the US ISM Service PMI and Nonfarm Payrolls. Traders will take cues from the data and find opportunities around the USD/CHF pair.