USD/CHF falls from 0.9100 after downbeat US Services PMI

• USD/CHF faces selling pressure near 0.9100 as US Dollar drops on weak ISM Services PMI data.
• Fed’s hawkish guidance has dented Fed rate cut expectations for June.
• Swiss weak Retail Sales boost speculation for more rate cuts by the SNB.

The USD/CHF pair faces a sharp sell-off near the round-level resistance of 0.9100 as the United States Institute of Supply Management (ISM) has reported weak Services PMI data for March. The Services PMI, which represents the service sector that accounts for two-thirds of the US economy, falls to 51.4 from expectations of 52.7 and the prior reading of 52.6.

The US Dollar has faced significant selling pressure after weak US Services PMI data. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, drop to 104.40. The market sentiment improves as the S&P 500 has added significant gains after a subdued opening

Meanwhile, market expectations for the Federal Reserve (Fed) reducing interest rates from the June meeting have eased significantly. The CME FedWatch tool shows that traders are pricing in a 54% chance that the Fed will trim interest rates in June, down from 70% a week ago. 10-year US Treasury yields rise to 4.39%.

Market prospects for the Fed pivoting to rate cuts have eased due to hawkish guidance from Fed policymakers. Atlanta Fed Bank President Raphael Bostic told CNBC that he sees the central bank reducing interest rates only once this year as the economy is maintaining strong momentum.

This week, investors will keenly focus on the US Nonfarm Payrolls (NFP) data for March, which will be published on Friday.

On the Swiss Franc front, weak Real Retail Sales have boosted expectations of more rate cuts by the Swiss National Bank (SNB). The Retail Sales data, which represents consumer spending, surprisingly dropped by 0.2% while investors projected a growth of 0.4%. Deepening cost-of-living crisis would force SNB policymakers to consider more quantitative easing decisions.