USD/CHF juggles near fresh 19-month low below 0.9060 as US labor market cools down

• USD/CHF is hovering near a fresh 19-month low below 0.9060 ahead of US economic data.
• The cooling US labor market has infused confidence among investors that the Fed would call for an early pause.
• After weak US Manufacturing PMI, Services PMI are also expected to contract ahead.

The USD/CHF pair is displaying a back-and-forth action above 0.9050 in the early Tokyo session. The Swiss Franc asset is expected to continue its downside momentum amid an absence of recovery signs after a plunge. The downside bias for the US Dollar has strengthened as the cooling United States labor market has propelled an unchanged policy stance from the Federal Reserve (Fed) for its May policy meeting.

The US Dollar Index (DXY) witnessed an intense sell-off on Tuesday after US Job Openings data dropped below 10 million for the first time since 2021. Market pundits considered it as a sign of cooling US labor market, which would allow Fed chair Jerome Powell to remain light on interest rates in May’s monetary policy meeting.

S&P500 futures are showing nominal gains in the early Asian session after ending Tuesday’s session on a bearish note, portraying an attempt of recovery in the risk appetite of the market participants. The demand for US government bonds soared as odds for a steady Fed policy zoomed led by declining labor demand and contracting manufacturing activities. The 10-year US Treasury yields have dropped below 3.34%.

For further action, US Automatic Data Processing (ADP) Employment and ISM Services PMI data will be keenly watched. According to the estimates, the US economy has hired additional 200K talent in March, lower than the former release of 242K.

After weaker-than-anticipated US Manufacturing PMI, Services PMI is also set to contract further. The Services PMI is seen declining to 54.5 from the former release of 55.1. And, New Orders Index is expected to soften firmly to 57.6 vs. February’s figure of 62.6.

On the Swiss franc front, the monthly Consumer Price Index escalated by 0.2% but remained below expectations of 0.4% and the former release of 0.7%. Also, annual CPI has softened to 2.9% from the consensus and the former release of 3.2% and 3.4% respectively. Softening inflationary pressures are going to delight Swiss National Bank (SNB) policymakers.