USD/CHF holds ground near 0.8850 as focus shifts to US labor market data

• USD/CHF continues to trade sideways around 0.8850 ahead of US labor market data.
• S&P500 futures remain subdued in the London session, portraying a quiet market mood.
• As per the estimates, the US private sector recorded fresh payrolls of 195K, significantly lower than July’s reading of 324K.

The USD/CHF pair is consolidating around 0.8850 from Monday as investors need fresh status about the United States labor market for further action. The Swiss Franc asset is awaiting the Employment Change data for August to be reported by Automatic Data Processing (ADP), which will be published on Wednesday at 12:15 GMT.

S&P500 futures remain subdued in the London session, portraying a quiet market mood ahead of labor market data. August labor market data carries huge importance as Federal Reserve (Fed) Chair Jerome Powell at the Jackson Hole Symposium that inflation is getting more responsive to the job market. Also, Fed Powell reiterated that further policy action will be dependent on incoming data.

Market participants expect that US hiring momentum has slowed down as firms are operating at lower operating capacity due to a poor demand outlook. As per the estimates, the US private sector recorded fresh payrolls of 195K, significantly lower than July’s reading of 324K. Higher-than-expected labor force addition would indicate that the labor market has not lost its resilience and inflation could remain stubborn ahead.

Meanwhile, investors are also focusing on US Commerce Minister Gina Raimondo's visit to China. Raimondo said the administration is aware of challenges and he is very optimistic about US-China ties. While, China's Premier Li Qiang said, “sound economic and trade relationship will not only be beneficial for our two countries, but for the entire world.”

On the Swiss Franc front, investors await the ZEW - Survey Expectations for August, which will be released on Wednesday. As per expectations, business conditions, employment conditions, and other elements affecting the day-to-day running of a business in Switzerland are improving. The sentiment indicator is seen at 31.3 vs. the former reading of -32.6. It seems that easing inflationary pressures due to higher interest rates by the Swiss National Bank (SNB) are improving recurring operations of Swiss business.