The USD/CHF pair discovers buying interest near the psychological support of 0.8500 in Thursday’s European session. The Swiss Franc asset rebounds as the US Dollar (USD) edges higher after posting a fresh 2024 low. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, finds a cushion after refreshing a more-than-seven-month low near 101.00.

Market sentiment favors risky assets as the Federal Reserve (Fed) looks set to start reducing interest rates in September. S&P 500 futures have posted nominal gains in European trading hours.

Market speculation for Fed interest rate cuts in September has strengthened as officials see them as appropriate. The confidence of Fed policymakers for unwinding the restrictive monetary policy stance has increased due to consistently easing price pressures and cooling labor market strength, according to the Federal Open Market Committee (FOMC) minutes for the July 30-31 policy meeting.

The US Bureau of Labor Statistics (BLS) reported on Wednesday that the number of total employees hired was 818K lower than previously estimated in the year to March 2024.

Going forward, investors will focus on the preliminary United States (US) S&P Global PMI data for August, which will be published at 13:45 GMT. However, the major trigger for the US Dollar this week will be Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium, which will be kicked off at 14:00 GMT and last till Saturday, on Friday. Fed Powell may provide cues about the likely size of interest rate reduction in September.

Meanwhile, the Swiss Franc will be influenced by market expectations of the Swiss National Bank’s (SNB) interest rate path amid the absence of top-tier economic data. The SNB is expected to cut interest rates further as price pressures remain well below the bank’s target of 2%.

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