USDCHF Fundamental Analysis – 12-September-2024

The Swiss Franc recently gained momentum, dropping to below $0.853 (USD/CHF) against the U.S. dollar, moving close to its lowest levels of the year. This upward movement is mainly due to the weakening of the U.S. dollar, sparked by a critical jobs report.

The report revealed fewer jobs were added in August than expected, which led to speculation that the Federal Reserve may consider a significant interest rate cut this month.

U.S. Job Growth Falls Short of Expectations

In the United States, job growth has been slowing down. The economy added fewer jobs than anticipated in August, and the job figures for June and July were also revised downward, showing a weaker job market than initially thought.

This has increased expectations that the Federal Reserve might lower interest rates to help stimulate economic growth.

Swiss Inflation Hits a Low Point

At the same time, Switzerland is seeing a drop in inflation. The country’s inflation rate fell to 1.1% in August, the lowest in five months.

This decreased from the 1.3% steady rate for the previous two months. The inflation rate also came below market expectations, set at 1.2%.

Swiss National Bank’s Response

The Swiss National Bank took action earlier this year in response to the economic situation. They implemented their second consecutive 25 basis point interest rate cut in June. This move was likely aimed at managing inflation and keeping the economy stable.

• Also read: USD/CNH Analysis – 12-September-2024

Conclusion: Swiss Franc Outlook

The Swiss Franc’s recent strengthening is closely tied to the weaker U.S. dollar and economic factors in both Switzerland and the U.S. With the Federal Reserve possibly lowering interest rates and inflation cooling off in Switzerland, the Swiss Franc is likely to maintain its strong position in the short term.

Understanding these trends can help investors and traders make more informed decisions about the currency market.

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