The USD/CHF pair saw a rise as investors turned to the US Dollar following strong US PMI data. The Federal Reserve’s Raphael Bostic mentioned that the inflation outlook may not improve as quickly as expected. Swiss Employment Level for Q1 was reported at 5.484 million, slightly lower than the previous reading of 5.488 million.
USD/CHF recovered from losses in the previous session, trading around 0.9150 during the European hours on Friday. The focus shifted to the US Dollar after better-than-expected PMI data, dampening risk appetite. The Federal Reserve’s hawkish sentiment was bolstered by the strong data, suggesting higher policy rates for a longer period.
The S&P Global US Composite PMI rose to 54.4 in May, surpassing market expectations. The Service PMI showed significant output growth, while the Manufacturing PMI also increased. Federal Reserve Bank of Atlanta President Raphael Bostic’s comments on inflation outlook impacted market expectations for a rate cut in September.
Switzerland’s Employment Level (QoQ) data showed a slight decrease from the previous reading. The yield on the 10-year Swiss government bond suggests that the Swiss National Bank may maintain current interest rates, potentially strengthening the CHF and weakening the USD/CHF pair.
Investors are monitoring for signals on potential Fed rate cuts. The Swiss National Bank’s unexpected rate cut in March marked the first easing in nine years, making it the first major central bank to adjust monetary policy.