According to the data released today Swiss consumer price fell by 0.4% in July against the value of the previous month and by 0.2% compared to the same period last year. Retail sales in Switzerland fell by 3.9% in July on annual basis.
Last Friday positive US labor market data for July was released. Number of jobs outside the US agricultural sector has grown by 255 000 against the forecast of +180 000. Unemployment rate remained unchanged (4.9% versus the forecast of 4.8% and 4.9% in June).
After the release of this data the pair USD/CHF has grown. The rise in the pair is also supported by expectations of the rate hike in the USA before the end of the year. Market participants believe that the US rate will be raised by 25 basis points, up to 0.75% in December.
However, strong US labor market data will be insufficient to encourage US Fed to raise interest rate in September in view of the poor US GDP for Q2 (in Q2 US GDP has grown by 1.2% and by 1.2% with seasonal adjustment against the forecast of +2.6%) and in anticipation of the first debate between presidential candidates Hillary Clinton and Donald Trump, scheduled for September 26.
However, expectations of more of monetary policy easing in several countries with the largest economies and the increase in the interest rate in the USA before the end of this year have raised investment attractiveness of the USD. It is likely that before the end of August the rise in the USD will continue, including the pair USD/CHF.