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Ahead of the Swiss GDP, USD / CHF Remains Low in the Mid-0.9300s
After reversing from the highest values since early December the day before, USD / CHF is still under pressure. Mixed US data, a risk-on mindset, and month-end consolidation all work in sellers' advantage. On a seasonally adjusted QoQ measure, Swiss Q4 GDP is anticipated to grow rather than decline YoY. Second-tier US statistics and risk catalysts are crucial for new energy.
As it approaches 0.9350 on Tuesday morning, USD / CHF demonstrates the pre-data anxiety. Nonetheless, the market's cautious optimism and the broad US Dollar volatility enable the Swiss currency pair to consolidate its first monthly gain in four months.
The White House's trade-friendly headline was supported by a decline in US Treasury bond rates.
However, despite its political differences with the nation of the dragon, the US extends an olive branch to China's business community, allowing the S&P 500 Futures to follow Wall Street's gains as of the time of publication. "Despite fraying relations with Beijing, US President Joe Biden is expected to forego broad new limits on American investment in China, denying a push by some hawks in his administration and Congress," reported Politico late Monday.
It's important to keep in mind that while the S&P 500 Futures print modest gains by following Wall Street's upbeat closing, during the quiet hours of Tuesday's trading, US Treasury bond yields continue to be subpar.
On Monday, US Durable Goods Purchases fell -4.5% in January, below the -4.0% forecast and 5.1% lower than in December. However, compared to analysts' forecasts of 0.0% growth and -0.3% prior readings, the Nondefense Capital Goods Orders ex Aircraft increased by 0.8%. In a similar vein, US Pending Home Purchases increased 8.0% MoM, exceeding expectations of 1.0% and previous levels of 1.1%.
However, in order to enable these kinds of long-term economic growth, Federal Reserve Governor Philip Jefferson stated on Monday that it is critical to return to 2% inflation. Reuters also expressed hawkish Fed worries by stating that "Economic data this month reflected still tight labor markets and sticky inflation, leading Fed funds futures traders to wager on higher rates, which in the US are now seen peaking in September at 5.4%, up from currently 4.58%."
The Gross Domestic Product (GDP) for Swirzerland's fourth quarter (Q4) will be important for moving forward. Forecasts indicate that the QoQ GDP increased by 0.3% from the previous quarter's 0.2%, but the YoY number indicates that economic activity shrank by 1.2% from the previous quarter's 0.5% growth.
In addition to the Swiss GDP, it will be crucial for USD / CHF traders to keep an eye on the preliminary US trade figures for January, the Conference Board's Consumer Confidence, the Chicago Purchasing Managers' Index, and the Richmond Fed Manufacturing Index for February.
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