Because there is less demand for safe havens, the USD/CHF ratio decreases as the US dollar weakens.
Expectations for enhanced Middle Eastern energy flows were raised by an agreement between Iran and Oman over shipping routes across the Strait of Hormuz.
In July, Swiss inflation unexpectedly fell to 0.4%, defying the Swiss National Bank's prediction of a modest increase.
During Thursday's Asian hours, USD/CHF was trading at about 0.8060, extending its losses for the third day in a row. As the US dollar (USD) encounters challenges from dwindling safe-haven demand, the pair weakens.
Following news that Iran and Oman had achieved a deal on a shipping route across the Strait of Hormuz, market sentiment changed, raising anticipation for more Middle Eastern energy shipments. The final draft of the joint Iran-Oman declaration is presently underway. Tehran stressed that the agreement does not signify a full reopening of the key waterway, but the proposed route is anticipated to run for two to four months.
As US labor data is viewed as slightly unfavorable for the USD, the dollar's tone weakens.
Recent US employment reports continue to indicate a labor market that is "tight but not necessarily adding to inflation pressure at the moment," according to Scotiabank strategists. They characterize this combination as "a little negative for the USD possibly." They believe that support for the dollar at the margin is tempered by the lack of a clear extra inflationary push from jobs data, which reinforces the softer tone that has arisen after the most recent FOMC-driven selloff.
The US private sector added just 44K jobs in July, down from 98K in June and falling short of the market consensus of 70K, according to ADP figures released on Wednesday. The US Initial Jobless Claims report on Thursday and the Nonfarm Payrolls (NFP) report on Friday are now being eagerly watched by traders.
Daly notes that the impact of tariffs is waning but cautions about inflation generated by technology.
With an Forex Speechtracker score of 5.4/10, which is just lower than the historical average of 5.6/10, Fed's Daly conveyed a message of moderate caution. While pointing out that technological investment is now driving up costs, Daly emphasized that tariffs had a definite influence on inflation and noted some signs that this effect is starting to wane. Daly stressed that supply shocks, such as the conflict in the Middle East, are thought to be mostly transient for inflation. Longer-term expectations are still well-anchored but should not be taken for granted, and he advocated keeping rates unchanged in July as additional evidence is gathered.
After the speech, the Forex Fed Sentiment Index dropped 2.23 points to 138.69, indicating a little retreat in perceived hawkishness. Even if the tone in the Forex Speechtracker moved marginally closer to neutral, the index is still firmly in hawkish territory over 100, suggesting that markets continue to see the Fed as inclined toward tighter policy.
The Swiss National Bank was taken aback when Swiss inflation fell to a four-month low of 0.4% in July from 0.5% in June. The bank had expected a minor increase in inflation after maintaining its policy rate at 0%.
However, considering the continued stability of Swiss banks, the SNB is anticipated to keep interest rates steady through the end of the year, considering further rate reductions as a backup plan rather than the primary approach.
Expectations for enhanced Middle Eastern energy flows were raised by an agreement between Iran and Oman over shipping routes across the Strait of Hormuz.
In July, Swiss inflation unexpectedly fell to 0.4%, defying the Swiss National Bank's prediction of a modest increase.
During Thursday's Asian hours, USD/CHF was trading at about 0.8060, extending its losses for the third day in a row. As the US dollar (USD) encounters challenges from dwindling safe-haven demand, the pair weakens.
Following news that Iran and Oman had achieved a deal on a shipping route across the Strait of Hormuz, market sentiment changed, raising anticipation for more Middle Eastern energy shipments. The final draft of the joint Iran-Oman declaration is presently underway. Tehran stressed that the agreement does not signify a full reopening of the key waterway, but the proposed route is anticipated to run for two to four months.
As US labor data is viewed as slightly unfavorable for the USD, the dollar's tone weakens.
Recent US employment reports continue to indicate a labor market that is "tight but not necessarily adding to inflation pressure at the moment," according to Scotiabank strategists. They characterize this combination as "a little negative for the USD possibly." They believe that support for the dollar at the margin is tempered by the lack of a clear extra inflationary push from jobs data, which reinforces the softer tone that has arisen after the most recent FOMC-driven selloff.
The US private sector added just 44K jobs in July, down from 98K in June and falling short of the market consensus of 70K, according to ADP figures released on Wednesday. The US Initial Jobless Claims report on Thursday and the Nonfarm Payrolls (NFP) report on Friday are now being eagerly watched by traders.
Daly notes that the impact of tariffs is waning but cautions about inflation generated by technology.
With an Forex Speechtracker score of 5.4/10, which is just lower than the historical average of 5.6/10, Fed's Daly conveyed a message of moderate caution. While pointing out that technological investment is now driving up costs, Daly emphasized that tariffs had a definite influence on inflation and noted some signs that this effect is starting to wane. Daly stressed that supply shocks, such as the conflict in the Middle East, are thought to be mostly transient for inflation. Longer-term expectations are still well-anchored but should not be taken for granted, and he advocated keeping rates unchanged in July as additional evidence is gathered.
After the speech, the Forex Fed Sentiment Index dropped 2.23 points to 138.69, indicating a little retreat in perceived hawkishness. Even if the tone in the Forex Speechtracker moved marginally closer to neutral, the index is still firmly in hawkish territory over 100, suggesting that markets continue to see the Fed as inclined toward tighter policy.
The Swiss National Bank was taken aback when Swiss inflation fell to a four-month low of 0.4% in July from 0.5% in June. The bank had expected a minor increase in inflation after maintaining its policy rate at 0%.
However, considering the continued stability of Swiss banks, the SNB is anticipated to keep interest rates steady through the end of the year, considering further rate reductions as a backup plan rather than the primary approach.
