USD/CHF RISES TO MULTI-WEEK HIGHS FOLLOWING HOT LABOUR MARKET DATA FROM THE US

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  • USD/CHF jumped near 0.8800, setting a five-day winning streak.
  • The US reported hot ADP figures, which strengthened the USD.
  • The USD DXY index is rising and trades at 102.65.

The USD/CHF has risen to its highest level since mid-July, towards 0.8800 and then settled near 0.8770, driven by a stronger USD. In simple terms, the US economy is holding firm, making investors place bets on a more aggressive bet on the Federal Reserve (Fed) which is benefiting the greenback.

The number of employed people in the US was 324,000 in July, according to Automatic Data Processing Inc. (ADP), which was higher than the 189,000 expectations but lower than the revised figure of 455,000 in June. 

US bond yields are increasing globally in response to the data. The 5- and 10-year yields increased by 4.26% and 4.10%, respectively, with both seeing more than 1% increases. The 2-year yield rose to 4.92%, with a 0.60% increase on the day. 

Regarding Fed expectations, according to the CME FedWatch tool, market participants are betting on low odds of a hike in September, while the probability of a walk in November stands near 30%, and investors foresee low odds of a 50 bps increase. However, the highlight with which the markets will make their projections will be Friday's Nonfarm payrolls (NFPs) report. The unemployment rate is anticipated to stay constant at 3.6%, while consensus for NFP has increased to 200k from 209k in June, while Average Hourly Earnings are expected to have eased.

For the rest of the session, the Swiss and American calendars will have nothing relevant to offer, so market sentiment and Fed bets will set the pace


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