Dollar Remains Stable As Swissy Slides and the Euro Strengthens

The dollar is attempting to recover once more, but there is no committed buying at this time while the Swiss Franc is falling strongly today, owing to selling versus the Euro and rising bond yields. As the annual Jackson Hole Symposium progresses, greenback traders will closely monitor the statements made by Fed officials today and tomorrow. Meanwhile, commodities currencies will pay attention to the stock market’s reaction and overall bias.

The Swiss Franc is expected to depreciate in the next months, according to Goldman Sachs experts. “SNB sight deposits have increased modestly in recent weeks, but there is no obvious evidence that the central bank has intervened to weaken the CHF. We still believe the fundamental view indicates to a weaker Franc in the future, but this trend will need to be resumed once the global economic picture has stabilized.”

The Swiss Franc, on the other hand, came under pressure when a Credit Suisse confidence index fell by 51 points to -7.8 in August, implying that the Swiss economy was at risk of an abrupt halt to the pandemic’s rebound in the US and China. As a result, supply chain difficulties for an export-dependent economy would be disrupted.

On Wednesday, the USD/CHF pair posted minor daily gains and maintained its bullish trend on Thursday. The pair fell somewhat after reaching a daily high of 0.9177 and was last seen up 0.26 percent on the day at 0.9180.

Dollar Remains Stable on Consumer Spending

US GPD rose at an annualized pace of 6.6 percent in the second quarter, revised from 6.5 percent and below the 6.7 percent projected, according to data released on Thursday. Consumer spending continued to be the key driver of total GDP growth in Q2, with business fixed investment spending also contributing positively to the topline growth rate.

When measured by the US Dollar Index, the greenback gains traction and jumps to daily highs slightly beyond the 93.00 marks (DXY). The index has now moved further into positive territory, reversing four daily pullbacks in a row, aided by higher yields and favorable developments on the US docket.

Fed officials acknowledge the hazards of the delta strain, the taper timeframe appears to be unaffected. Key Fed officials at Jackson Hole and elsewhere are likely to remain optimistic that substantial further progress is on the way, and that asset purchases will begin to reduce in the coming months.