USD/CHF edges below 0.8500 on subdued US Dollar, Swiss, US Manufacturing PMI eyed

• USD/CHF retraces recent gains as the US Dollar halts its winning streak.
• IMF Managing Director Kristalina Georgieva’s moderate comments could weaken the Greenback.
• Traders await Swiss Manufacturing PMI data to gain fresh impetus on the Swiss economy.

USD/CHF retraces its recent gains registered on Tuesday, trading lower near 0.8490 during the Asian session on Wednesday. The US Dollar (USD) received upward support against the Swiss Franc (CHF) due to the risk-off market sentiment, prompting investors to seek refuge in the US Dollar (USD) ahead of key economic data releases from the United States (US).

The US S&P Global Manufacturing PMI's lower-than-expected figure of 47.9, differing from the anticipated 48.2, is a noteworthy economic development. Looking ahead, investors are likely to pay close attention to US data on Wednesday, which includes the December ISM Manufacturing PMI, November JOLTS Job Openings, and the Federal Open Market Committee (FOMC) Minutes. The FOMC Minutes are particularly relevant given Chairman Jerome Powell's mention of potential rate cuts following the latest Federal Reserve (Fed) monetary policy decision.

The USD might have encountered downward pressure following the moderate comments from International Monetary Fund (IMF) Managing Director Kristalina Georgieva. Her optimism about the US economy, coupled with the advice for Americans to "cheer up," suggests a less aggressive stance. Georgieva anticipates that interest rates will moderate in 2024 due to a decline in inflation. This perspective deviates from a more hawkish stance and could contribute to a softer trajectory for the Federal Reserve's (Fed) interest rates, potentially influencing the USD negatively.

The Swiss ZEW Survey – Expectations experienced a further decline in December, indicating subdued economic sentiment. However, the KOF Swiss Leading Indicator surprisingly improved, defying expectations. The Swiss National Bank (SNB) is anticipated to actively intervene in the foreign exchange market to support the Swiss Franc (CHF).

Looking forward, the SVME Manufacturing Purchasing Managers Index (PMI) data will be closely monitored by the investors on Wednesday to gain fresh impetus on the Swiss economy.