During Wednesday's early Asian session, the USD/CHF pair consolidates its recent decline below the 0.8800 level. As a result of the disappointing US data and the decline in bond yields, the US dollar is likely to experience some follow-through selling pressure. In the meantime, the US Dollar Index (DXY), a measure of the USD's value relative to six other main currencies, fluctuates between 103.60 and 103.36. At the time of publication, the USD/CHF exchange rate was 0.8790, a gain of 0.07%.

Following weaker U.S. economic data, the dollar is broadly declining. Tuesday's US Job Openings and Labour Turnover Survey (JOLTS) for July showed the lowest reading since March 2021, falling to 8.827M compared to 9.165M previously and 9.475M anticipated. The Conference Board's (CB) Consumer Confidence Index for August decreased to 106.10 from 114.00 in July, which was below the market's expectation of 116.0. The S&P/Case-Shiller Home Price Indices improved to -1.2% YoY from -1.7% previously and the expected -1.2%.

However, Federal Reserve (Fed) Chairman Jerome Powell left the door open for the possibility of a further rate increase. Nonetheless, it would depend on incoming information. The state of the labour market may influence the USD's direction in the short term. The release of US employment data later this week could trigger market volatility, according to market participants. The market anticipated that the Fed would delay rate rises until its meeting in September. According to the CME's FedWatch Tool, the likelihood of a rate rise at the next meeting has decreased from 20% to 16%. In turn, this results in some selling pressure on the USD.

During her four-day visit to Beijing, US Commerce Secretary Gina Raimondo emphasised US concerns regarding difficulties operating American enterprises and national security issues. During a meeting, the US and China also discussed China's recent export restrictions on gallium and germanium. The escalating tension between the two largest economies in the world should temper market optimism. This may benefit the traditional safe-haven Swiss Franc and operate as a headwind for the USD/CHF currency pair.

Moving forward, market participants will focus on the August Swiss KOF Leading Indicator, the ZEW Survey, and the Consumer Price Index YoY. US ADP private employment and estimate of Q2 Gross Domestic Product (GDP) data are due Wednesday across the Atlantic, followed by US inflation data on Thursday and the highly anticipated Nonfarm Payrolls on Friday. These figures may cause market volatility, and traders will find trading opportunities around the USD/CHF pair.

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