USD/CHF faces barricades around 0.9170 ahead of US ISM PMI and Swiss Inflation data
03.04.2023, 02:40

USD/CHF faces barricades around 0.9170 ahead of US ISM PMI and Swiss Inflation data

  • USD/CHF is facing hurdles near 0.9170 as the USD Index is having a smooth ride for a fresh weekly high.
  • S&P500 futures have extended losses witnessed as investors could cut longs in equities due to a significant rise in the oil price.
  • Higher inflation is weighing on the pockets of households, which could be impacting the retail demand.

The USD/CHF pair is sensing resistance near 0.9170 in the Asian session after a marginal recovery. The Swiss franc asset is expected to continue its downside journey as the US Dollar index (DXY) looks set to refresh its weekly high above 102.95 ahead. Rising expectations for a rebound in global inflation led by higher oil prices after the announcement of oil production cuts by OPEC+ has infused fresh blood into the USD Index.

S&P500 futures have extended losses witnessed in the Asian session on hopes that investors could cut longs in equities due to a significant rise in the oil price. United States equities are struggling to firm their feet, portraying a risk-aversion theme. The demand for US government bonds has been sluggish as the Federal Reserve (Fed) is expected to raise rates further. This has led to a rise in the yields offered on 10-year US Treasury bonds to 3.51%.

On Monday, the USD Index is expected to remain extremely volatile amid the release of the US ISM Manufacturing PMI (March) data. The consensus shows a marginal drop to 47.5 from the former release of 47.7. Other than the PMI figure, New Orders Index will be keenly watched. The forward-looking economic indicator for Manufacturing PMI is expected to contract dramatically to 44.6 vs. the prior release of 47.0. It seems that higher inflation is weighing on the pockets of households, which could be impacting the retail demand.

The Swiss Franc asset will remain in action ahead of Consumer Price Index (CPI) data. Inflationary pressures in the Swiss zone have remained higher and the Swiss National Bank (SNB) has already left room open for more rate hikes.

 

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