USD/CHF Faces Downward Pressure Despite Strong Dollar, SNB Intervention in Focus

In the Asian market on Thursday, USD/CHF continued its decline for the second consecutive trading day, reaching around 0.8480. Despite the overall strength of the US dollar (USD), USD/CHF is encountering downward pressure, potentially influenced by interventions from the Swiss National Bank (SNB) in the foreign exchange market.

The SVME Manufacturing Purchasing Managers’ Index (PMI) for December, released on Wednesday, saw an improvement, rising to 43 from the previous 42.1. This positive development in the manufacturing sector’s operating conditions may boost CHF bulls.

However, global economic growth concerns at the end of 2024 are fostering market risk aversion, leading investors to seek refuge in the U.S. dollar. Additionally, the rise in U.S. bond yields is contributing to the USD’s strength. The U.S. dollar index is hovering around 102.40 after recent gains, while the two-year and 10-year U.S. Treasury yields stand at 4.33% and 3.93%, respectively.

Wednesday’s ISM Manufacturing Purchasing Managers’ Index (PMI) report revealed an increase to 47.4 in December from the previous 46.7, surpassing the expected value of 47.1. This positive outcome appears to have added to the positive momentum of the US dollar. Conversely, U.S. JOLTs job openings declined to 8.79 million in November, falling below the anticipated 8.85 million.

Looking ahead, Thursday’s focus will be on labor market data, including the ADP payroll change and last week’s initial jobless claims, providing further insights into the economic situation. The possibility of SNB intervention and the overall market sentiment will likely play key roles in shaping the trajectory of USD/CHF.

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