USDCHF Eyes Recovery as Robust US Jobs Data Eases Safe-Haven Demand
The US dollar is getting stronger against the Swiss franc because good news about the US job market and services sector makes people less interested in traditional safe-haven assets. The USDCHF pair bounced back after a better-than-expected Nonfarm Payrolls (NFP) report, getting closer to the important psychological level of 0.8000.
The US economy added 147,000 jobs in June, which was more than the 110,000 that were expected. This report, along with the fact that weekly unemployment claims fell to 233,000 and the Services PMI rose to 50.8, shows that the US economy is strong. Investors were quite happy, and stocks and government rates went up, which made the dollar more valuable.
The current Consumer Price Index for Switzerland, on the other hand, went up a little, by 0.2% monthly and 0.1% yearly. This is a small comfort for the Swiss National Bank after the recent cut in rates to 0.00%, but it doesn’t do much to match the momentum created by positive US data.
Flows into the Swiss franc has stopped as global risk sentiment recovers and fears of a recession fade. The USDCHF pair hit a low of 0.7872 earlier this week and is now trying to break through resistance at 0.8000. The Relative Strength Index and other technical indicators suggest that selling pressure may be easing. If the pair breaks over the 20-day moving average at 0.8092, it could go up even more.
Also read: US Dollar Shows Signs of Stability After Economic Data Surprises, But Risks Loom Large