USD/CHF steady as US data offset by shutdown gloom
USD/CHF trades, virtually unchanged on the day after pulling back from a three-month high of 0.8124 hit earlier as data from the United States (US) supports the US Dollar (USD).
According to Automatic Data Processing (ADP), private sector employment rose by 42,000 in October, beating market expectations of 25,000. Similarly, the Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI) surprised to the upside, climbing to 52.4 from 50.0 in September, indicating an acceleration in service-sector activity. These figures, though encouraging, have not fully erased uncertainty over the Federal Reserve’s (Fed) next policy move.
Fed Chair Jerome Powell recently noted that another rate cut in December is “not a foregone conclusion,” suggesting a wait-and-see approach as official data releases remain disrupted. According to the CME FedWatch tool, markets now price a 68% chance of a rate cut in December, down from 94% before Powell’s remarks.
However, the political uncertainty linked to the prolonged US government shutdown continues to cap the Greenback. The funding stalemate, now in its sixth week, is on track to become the longest in US history after the Senate rejected a temporary funding proposal for the fourteenth time. The shutdown has delayed the release of several official statistics and is fueling concerns about its growing impact on the broader economy.
Meanwhile, the strength of the Swiss Franc (CHF) reflects rising global risk aversion, as elevated technology valuations have reignited fears of market corrections. Warnings from major Wall Street bank CEOs about potential equity pullbacks have boosted demand for safe-haven assets.
Investors now turn their attention to release of Swiss unemployment data, which could offer fresh insight into the resilience of the domestic labor market.
Source: Fxstreet
