Swiss Franc Eases Ahead Of Swiss Inflation Report

Republished By Plato

Followers: 0

Swiss inflation projected to fall to 1.6%
ADP Employment blows past estimate

The Swiss franc has extended its losses on Wednesday. In the North American session, USD/CHF is trading at 0.8795, up 0.50%.

Swiss inflation expected to fall to 1.6%

Swiss National Bank President Jordan has often complained that inflation remains too high, although other central bankers, who are grappling with much higher inflation, would be happy to change places. I suppose that Jordan would grudgingly admit that the inflation picture has brightened. Inflation fell to 1.7% in June, as both the headline and core rates dropped into the Bank’s target range of 0%-2% for the first time since January 2022. The good news is expected to continue on Thursday, with Swiss inflation projected to tick lower to 1.6% in July.

Although Switzerland’s inflation picture is looking bright, the SNB is still expected to go ahead with a rate hike at the meeting on September 21st. The SNB is concerned that inflation could reverse directions and rise to 2% by the end of the year, due to rising services inflation and higher mortgage costs. Inflation may continue to decelerate in July, but the SNB could dismiss the downswing as temporary and decide to keep raising rates.

Investors will be keeping a close eye on US employment releases over the next few days. The ADP Employment report kicked off a host of job releases, highlighted by nonfarm payrolls on Friday. ADP looked sharp with a gain of 327,000 for July, below the June reading of a revised 455,000 but easily beating the consensus estimate of 189,000. A month ago, the sizzling ADP reading made headlines and raised speculation that nonfarm payrolls might follow suit with a strong release. In the end, nonfarm payrolls fell significantly, as expected. It remains to be seen whether NFP will deliver another soft reading or will it follow ADP and surprise with a banner reading.

USD/CHF Technical

USD/CHF is testing resistance at 0.8776. The next resistance is at 0.8848
0.8665 and 0.8593 are providing support

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.