Swiss Franc declines as US Dollar rebounds, eyes on US Services PMI

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The Swiss Franc (CHF) faces selling pressure against the US Dollar (USD) at the start of the week. The USD/CHF pair is down 0.25% to near 0.8055 during the European trading session as the US Dollar rebounds despite traders reconsidering Federal Reserve (Fed) interest rate hike expectations.

Swiss Franc underperforms the US Dollar as the latter regains ground.
The US Dollar rebounds even as Fed interest rate hike prospects have slightly eased.
Investors await the Swiss Unemployment Rate and the US ISM Services PMI for June.

At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.15% higher at around 101.00.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.11%	0.13%	0.50%	0.10%	0.14%	0.48%	0.23%
EUR	-0.11%		0.03%	0.39%	-0.01%	0.05%	0.37%	0.12%
GBP	-0.13%	-0.03%		0.35%	-0.06%	-0.03%	0.36%	0.11%
JPY	-0.50%	-0.39%	-0.35%		-0.42%	-0.36%	-0.05%	-0.22%
CAD	-0.10%	0.00%	0.06%	0.42%		0.03%	0.38%	0.17%
AUD	-0.14%	-0.05%	0.03%	0.36%	-0.03%		0.36%	0.13%
NZD	-0.48%	-0.37%	-0.36%	0.05%	-0.38%	-0.36%		-0.24%
CHF	-0.23%	-0.12%	-0.11%	0.22%	-0.17%	-0.13%	0.24%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

According to the CME FedWatch tool, the odds of the Fed delivering at least one interest rate hike by the end of September are 53.2%, down from 59.4% seen a week ago.

Traders have slightly trimmed hawkish Fed bets as the United States (US) Nonfarm Payrolls (NFP) data on Thursday showed new jobs created in June were fewer than expected.

For fresh cues regarding the US interest rate outlook, investors await the Federal Open Market Committee (FOMC) Minutes of the June policy meeting, which will be released on Wednesday.

In Monday’s session, investors will focus on the US ISM Services Purchasing Managers’ Index (PMI) data for June, which will be published at 14:00 GMT. The Services PMI is expected to arrive at 54.2, lower than 54.5 in May.

On the Swiss Franc (CHF) front, investors await Swiss jobless data for June, which will be published at 08:00 GMT. The Unemployment Rate is expected to have remained steady at 3%.

Economic Indicator

ISM Services PMI

The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector, which makes up most of the economy. The indicator is obtained from a survey of supply executives across the US based on information they have collected within their respective organizations. Survey responses reflect the change, if any, in the current month compared to the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that services sector activity is generally declining, which is seen as bearish for USD.

Why it matters to traders?

The Institute for Supply Management’s (ISM) Services Purchasing Managers Index (PMI) reveals the current conditions in the US service sector, which has historically been a large GDP contributor. A print above 50 shows expansion in the service sector’s economic activity. Stronger-than-expected readings usually help the USD gather strength against its rivals. In addition to the headline PMI, the Employment Index and the Prices Paid Index numbers are also watched closely by investors as they provide useful insights regarding the state of the labour market and inflation.

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