USD/CHF approaches a six-week high near 0.9860 in advance of US ISM Services PMI data

In the early Tokyo session, the USD/CHF pair is rising gently approaching the six-week high near 0.9860. After remaining in the hands of bulls for the previous month, the asset has retreated to a sideways trend. The major is fluctuating in a range of 0.9783-0.9859, and a move to the upside is anticipated.

The value of the asset has increased dramatically since the release of positive US Nonfarm Payrolls (NFP) data on Friday. The prospects of a third consecutive 75 basis point (bps) rate hike by the Federal Reserve (Fed) have risen after the US economy added 315k jobs in August, exceeding predictions of 300k. Policymakers at the Fed are confronted with the unpleasant reality of a delayed response to rising inflation. However, the Fed's concerns are diminishing due to the US economy's flurry of solid employment gains.

In the meantime, the US dollar index (DXY) reached a new 20-year high of 110.03 despite an increase in the Unemployment Rate. The unemployment rate came in at 3.7%, exceeding expectations and the previous release of 3.5%. Tuesday's US ISM Services PMI data will be the focal point of investors' attention moving ahead. The economic data is anticipated to decrease to 54.9 from 56.7 previously. Monday will be a market holiday in the United States in observance of the Labor Day holiday.

Meanwhile, Real Retail Sales statistics that fell short of expectations have depressed the Swiss franc. The economic statistics came in at 2.6%, which was below the consensus estimate of 3.3% but higher than the previous release of 0.7%. In addition, the Consumer Price Index (CPI) has increased to 3.5% annually, above expectations and the previous reading of 3.4%.