USD/CHF holds losses after soft US labor market data

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Majors,Currencies

On Friday, the USD/CHF fell to a daily low of 0.8375 and then recovered back above 0.8400.

Pair bottomed at a low of 0.8375 and then recovered above 0.8400 but holds daily losses. US August NFPs came in lower than expected, following this weak labor market data trend. Investors might bet on a bigger cut in September from the Fed. The upside, however, is limited as the US reported weak labor market figures.

Following the data, based on the CME FedWatch tool, the likelihood of a 0.50% rate cut by the Federal Reserve at its September 18 meeting remained steady at around 40%, but what it a done deal is that the easing cycle will start in that month, with a 25 bps cut. Incoming data will justify or not a bigger cut.

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