USD/CHF surges to a weekly high above the 0.8850 area, Fed’s Powell speech eyed

• USD/CHF continues to rise, approaching the highest daily close in a month at around 0.8853.
• US economic data showed mixed results.
• Market participants will keep an eye on Fed Chairman Jerome Powell's Speech for fresh impetus.

The USD/CHF pair extends its upside to the highest daily close in a month above the 0.8850 mark during the Asian trading hours on Friday. The pair currently trades near 0.8853, gaining 0.09% on the day. Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against six other major currencies, surges to the 104.00 mark, supported by the higher US Treasury yields. That said, the 10-year US Treasury yield climbs to 4.24%, while the 2-year yield remains stay above 5%.

On Thursday, US Durable Goods Orders MoM declined -5.2% in July, above expectations of -4% but falling short of the previous month's gain of 4.4%. This is the greatest drop since April 2020. Meanwhile, the Chicago Fed National Activity Index increased to 0.12 in July from -0.33 prior, and the Kansas Fed Manufacturing Activity Index rose to 12.0 in August from -20.0 in the previous month.

Philadelphia Federal Reserve (Fed) President Patrick Harker stated at the Jackson Hole Symposium that the central bank has probably done enough with restrictive monetary policy. He also said that he believes the Fed will remain interest rate stable this year, but that next year would depend on the data. While, Boston Fed President Susan Collins said further rate rises are possible and that sending a strong signal regarding the timing of rate cuts is premature.

On the other hand, the Swiss Federal Customs Administration reported earlier this week that Switzerland’s Trade Balance narrowed to 3,129M against the market consensus of 4,300M. Meanwhile, Exports were down 16.7% in July. In the same period, Imports dropped by 12.5%. Nevertheless, growing concerns about China's deteriorating economic conditions should dampen market optimism. This may benefit the traditional safe-haven Swiss Franc and act as a headwind for the USD/CHF pair.

In the absence of economic data released from Switzerland, the USD/CHF pair continues to be at the mercy of USD price dynamics. Market participants will keep an eye on Fed Chairman Jerome Powell's Speech on Friday. The events will be critical for determining a clear movement for the pair.