USD/CHF aims to recapture monthly lows at 0.9500 ahead of Swiss Retail Sales and US PCE

• USD/CHF is aiming to recapture monthly lows around 0.9500 as poor US GDP data has weakened DXY.
• A slump in economic activities and retail demand mark as the beginning of a recession in an economy.
• In today’s session, the US PCE and Swiss Real Retail Sales data will remain in limelight.

The USD/CHF pair has displayed a less-confident reversal after hitting a low of 0.9540 in the late New York session. The further downside remains warranted as the asset is likely to carry forward its three-day losing streak after a downbeat US Gross Domestic Product (GDP) data, released on Thursday. A downside move would drag the asset towards its monthly low at 0.9504.

The US Bureau of Economic Analysis reported the annualized GDP for the second quarter at -0.9%, which has been improved from the prior release of -1.6% but remained lower than the consensus of 0.5%. Back-to-back downbeat performance on the retail demand and productivity front in the US economy is raising concerns for the Federal Reserve (Fed).

A slump in economic activities and retail demand marks the beginning of a recession in an economy. The resurgence of recession and a picture-clear interest rate extent by the Fed till the end of 2022 has weakened the US dollar index (DXY).

In today’s session, the US Personal Consumption Expenditure (PCE) inflation data carries utmost importance. The economic data is likely to release at 6.7%, higher than the former figure of 6.3%. This indicates that the price pressures are not going to find a peak in the nearest future and the Fed will be blamed further for their higher responsive action towards the soaring interest rates.

However, the Swiss franc economy will report the annual Real Retail Sales data. Earlier, the economic data landed at -1.6% and this time the economic catalyst is expected to remain higher as soaring energy bills and prices of food products will elevate the end figure. However, a slippage in the economic data will indicate a major slump in the overall demand. This may weaken the Swiss franc bulls ahead.