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IPC Index — Mexico Market- USD/CHF drops to near 0.7765 as the US Dollar corrects amid increase in dovish Fed expectations.
- Weak US job data has prompted expectations of Fed interest rate cuts in March.
- The SNB is unlikely to make any monetary policy adjustment in the near term.
The USD/CHF pair trades 0.22% lower to near 0.7765 during the late Asian trading session on Friday. The Swiss Franc pair is under pressure as the rally in the US Dollar (USD) has paused, following an increase in dovish Federal Reserve (Fed) expectations.
During the press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major peers, is down 0.2% to near 97.75.
According to the CME FedWatch tool, the possibility of the Fed reducing interest rates by 25 basis points (bps) to 3.25%-3.50% in the March meeting has improved to 22.7% from 9.4% seen on Wednesday.
Trades raise dovish Fed bets as latest United States (US) job market-related data showed signs of continued slowdown in the labor demand. On Thursday, the US JOLTS Job Openings data for December showed that US employers posted 6.542 million fresh job vacancies, significantly lower than estimates of 7.2 million and the previous reading of 6.928 million.
Meanwhile, the ADP reported on Wednesday that the private sector hired 22K fresh workers in January, fewer than 37K in December.
In the Swiss region, investors seek fresh cues on the Swiss National Bank’s (SNB) monetary policy outlook. The SNB is likely to hold interest rates at 0% in the near term as they remain concerned over soft inflationary pressures. Earlier this week, SNB Chairman Martin Schelegl said, “My greatest concern is of course inflation and price stability, and we [SNB] do everything we can to ensure that,” Reuters reported.
