USD/CHF Languishes Near Multi-Day Low, Below 0.9000 As Traders Look To US NFP

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  • USD/CHF drifts lower for the third straight day amid the prevalent USD selling bias.
  • Rising bets for a September Fed rate cut move continue to weigh on the Greenback.
  • The downside is likely to remain limited as traders await the release of the US NFP.

The USD/CHF pair remains under some selling pressure for the third successive day and slides to a multi-day low, below the 0.9000 psychological mark during the Asian session on Friday. Bearish traders now await a sustained breakdown through the 100-day Simple Moving Average (SMA) before positioning for an extension of the recent pullback from a one-month peak touched earlier this week amid sustained US Dollar (USD) selling.

The incoming softer US macro data pointed to signs of weakness in the labor market and a loss of momentum in the economy at the end of the second quarter. This reaffirms market bets that the Federal Reserve (Fed) will start cutting rates in September and drags the USD Index (DXY), which tracks the Greenback against a basket of currencies, to over a three-week low, which, in turn, is seen as a key factor exerting downward pressure on the USD/CHF pair. 

Apart from this, the decline could further be attributed to some repositioning trade ahead of the closely-watched US monthly employment details, due for release later during the North American session. The popularly known Nonfarm Payrolls (NFP) report will play a key role in influencing market expectations about future policy decisions, which, in turn, should drive the USD demand and determine the near-term trajectory for the USD/CHF pair. 

Meanwhile, the Swiss Consumer Price Index (CPI), released on Thursday, declined to 1.3% YoY in June as compared to the 1.4% YoY expected. Furthermore, the core gauge ticked lower to the 1.1% yearly rate against the 1.2% anticipated, which could allow the Swiss National Bank (SNB) to ease further. Moreover, the SNB had shown readiness to intervene in the FX market, which should cap the Swiss Franc (CHF) and lend support to the USD/CHF pair.

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