USD/CHF WEAKENS BELOW 0.8750 ON RISK-ON MOOD, SOFTER US DOLLAR
- USD/CHF drifts lower to near 0.8715 in Friday’s early Asian session.
- US July Retail Sales came in better than expected in July, lifting the Greenback.
- The renewed fear of geopolitical tension in the Middle East could support the CHF.
The USD/CHF pair trades on a softer note near 0.8715 during the early European session on Friday. The pair edges lower on the back of the softer US Dollar (USD). Meanwhile, the USD Index (DXY), a measure of the value of the US Dollar relative to a basket of foreign currencies, currently trades around 102.92, losing 0.12% on the day.
The speculation of the US Federal Reserve rate cut in September continues to undermine the Greenback. Nonetheless, traders place lower bets on deeper rate cuts due to the optimistic US Initial Jobless Claims and upbeat Retail Sales data on Thursday. According to the CME FedWatch Tool, financial markets are now pricing in nearly 80%odds of a September rate cut and expect 200 basis points (bps) of reduction in the next 12 months, though that will depend on incoming data.
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