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As the US economy tightened, the S&P Global and ISN Manufacturing PMIs dipped into the recessionary range. Following weak US manufacturing data, the yields on US Treasury bonds and the Dollar both plunge.
After reaching a daily high of 0.9196, the USD/CHF fell by 0.17% due to lower-than-expected inflation in Switzerland. Nevertheless, a weaker-than-expected data on manufacturing activity in the US caused the USD/CHF pair to turn around because investors believed the US Federal Reserve (Fed) would stop hiking interest rates. The USD/CHF exchange rate is 0.9137 as of the time of writing.
After the US economic data, including the S&P Global and ISM Manufacturing PMIs, came in worse than expected, the Swiss Franc gained strength. S&P Global Manufacturing PMI for March was 49.2, which fell short of expectations for 49.3. Subsequently, the Institute for Supply Management (ISM) released its Manufacturing PMI, which fell to 46.3, below the forecast of 47.5 and below the figures from February.
As a result, both the US Dollar (USD) and yields on US Treasury bonds fell. The USD/CHF extended its losses past the 0.9150 area, hitting a low of 0.9115.
The US Dollar Index (DXY), which measures how six different currencies fare against the US Dollar, declines 0.39% to 102.196. At 4.005% and 3.430%, respectively, the rates on US 2- and 10-year Treasury bonds are decreasing by two and four basis points each.
Switzerland’s headline inflation rate was lower than anticipated, coming in at 2.9% YoY versus predictions of 3.2%. Compared to the 2.5% predicted in February, core inflation increased by 2.2% YoY. It cannot be ruled out that further increases in the SNB policy rate would be necessary to maintain price stability over the medium term, according to Thomas Jordan, governor of the Swiss National Bank (SNB), who raised rates by 50 basis points to 1.50% in March.
On the daily chart, the USD/CHF is continuing to decline. The USD/CHF broke below its bottom trendline after creating a descending triangle in a downtrend, indicating that more decline is anticipated. As a result, 0.9115 would serve as the first support for USD/CHF. If the latter is breached, the figure at 0.9100 will be revealed.
