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• USD/CHF steadies below 0.8500 as the Fed looks all set to cut interest rates in September.
• The US Dollar fails to recover strongly despite upbeat US Durable Goods Orders data for July.
• Swiss Q2 Employment Level rose to 5.499 million.

The USD/CHF pair hovers below the psychological resistance of 0.8500 in Monday’s American session. The Swiss Franc asset remains in the bearish trajectory as Federal Reserve (Fed) September interest rate cuts have been fully priced in by market participants, which have weighed on the US Dollar (USD) and have improved the appeal of risky assets.

The S&P 500 opens a bullish note on Monday. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges higher from the annual low of 100.53. However, its near-term outlook remains bearish.

The confidence of investors that the Fed will begin reducing interest rates in September increased after the speech from Fed Chair Jerome Powell at the Jackson Hole (JH) Symposium on Friday indicated that the central bank is prepared to pivot to policy normalization. Jerome Powell said, “The time has come for policy to adjust.” Fed officials gear up for cutting interest rates as they worry that downside risks to the United States (US) labor market have increased. While policymakers remain confident that inflation is on track to sustainably return to the desired rate of 2%.

Meanwhile, upbeat US Durable Goods Orders data for July failed to prompt a strong recovery in the US Dollar. New orders for Durable Goods that drive core inflation rose at a robust pace of 9.9% from the estimates of 4%. In June, the economic data contracted sharply by 6.9%.

On the Swiss Franc front, the Q2 Employment Level rose to 5.499 million from the prior release of 5.481 million. Though the labor market swelled, it is less likely to impact market speculation for the continuation of interest rate cuts by the Swiss National Bank (SNB) in September.

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