- USD/CHF trades broadly stable around 0.7960, while the US Dollar’s outlook remains weak.
- US Initial Jobless Claims for the week ending September 5 came in at their highest in four years.
- SNB’s Schlegel warns that negative interest rates could have undesirable side effects for savers and pension funds.
The USD/CHF pair trades calmly near 0.7960 during the late Asian trading session on Friday. The Swiss Franc pair ticks up as the US Dollar stabilizes after a sharp downside move on Thursday.
The US Dollar slumps on Thursday after the release of the United States (US) Initial Jobless Claims data for the week ending September 5, which showed that the number of individuals filing for jobless benefits for the first time were . Initial Jobless Claims came in at 263K, higher than expectations of 235K and the prior reading of 236K.
Poor US weekly jobless claims add to already escalating downside labor market concerns due to which traders are confident that the Federal Reserve (Fed) will reduce interest rates in the policy meeting on Wednesday.
According to the CME FedWatch tool, traders see a 7.5% chance that the Fed will cut interest rates by 50 basis points (bps) to 3.75%-4.00% on September 17, while the rest point a standard 25-bps interest rate reduction.
In Friday’s session, investors will focus on preliminary US Michigan Consumer Sentiment Index data for September, which will be published at 14:00 GMT. Investors will closely track the data to know whether Fed dovish expectations have eased the negative impact of tariffs on the sentiment of individuals. The Consumer Sentiment index is expected to come in slightly lower at 58.0 from 58.2 in August.
On the Swiss Franc (CHF) front, the next major trigger will be the Swiss National Bank’s (SNB) interest rate decision later this month. The SNB is unlikely to move interest rates into the negative territory as Chairman Martin Schlegel said on Wednesday that negative interest rates could have “undesirable side effects for savers and pension funds”.
