The USD/CHF pair saw an uptick to 0.8680 during Monday’s Asian session, marking its second consecutive session of gains. The US Dollar (USD) strengthened as market sentiment indicated that the Federal Reserve is leaning towards maintaining interest rates at the upcoming March meeting, buoyed by robust US employment figures released on Friday.
The US Bureau of Labor Statistics (BLS) reported an impressive addition of 353,000 jobs in January, surpassing both the previous reading of 333,000 and the market consensus of 180,000. January’s Average Hourly Earnings (MoM) exceeded expectations at 0.6%, surpassing the anticipated 0.3% and December’s 0.4%. The Unemployment Rate held steady at 3.7%, in line with the market consensus of 3.8%.
Federal Reserve Chair Jerome Powell emphasized a cautious approach to initiating rate cuts in the March meeting, citing the current economic strength. In contrast, Austan Goolsbee, President of the Chicago Federal Reserve Bank, viewed the robust job growth as a positive sign for the resilient labor market and not a reason to delay rate cuts.
Meanwhile, the Swiss Manufacturing Purchasing Managers Index (PMI) reported a marginal improvement in production growth in Switzerland, albeit falling short of market expectations. Despite exceeding market consensus in Gross Domestic Product, Swiss Real Retail Sales and Consumer Demand experienced a decline. Market anticipation now revolves around the potential for the Swiss National Bank (SNB) to implement its first-rate cut in September 2024, aligning with consensus expectations. The USD/CHF pair remains influenced by these economic indicators as traders assess the evolving dynamics in both the US and Swiss economies.
