Today’s USD/CHF price analysis is bullish as the US economy continues to impress. Stronger-than-expected services data overnight strengthened the argument for rate hikes, and markets are now pricing in a 75% chance that the Fed will raise rates by 75 basis points this month.

For the second consecutive month, the US services sector expanded on higher employment and order growth in August as supply constraints, and price pressures subsided. This report strengthened the argument that the economy was not in a recession despite declining output in the year’s first half.

According to the Institute for Supply Management, the non-manufacturing PMI increased marginally from 56.7 in July to 56.9 last month, marking the second consecutive month of growth following three falls.

Reuters economists predicted that the non-manufacturing PMI would fall to 54.9. A reading above 50 denotes growth in the services sector, which accounts for more than two-thirds of all economic activity in the United States.

The expansion in the service sector came after the ISM’s manufacturing survey on Thursday, which also revealed that factory activity in the United States increased steadily in November. It defies the trend in other major economies and adds to the evidence that the economy was not in recession even though its GDP decreased in its first half.

This data gave the dollar yet another reason to push higher. USD/CHF is moving closer to parity and might get there if the dollar rally continues.

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