The USD/CHF pair is not ready to retreat. The US dollar is attempting to recover losses after US Federal Reserve Board member Lisa Cook refused to resign, despite President Donald Trump's announcement of her removal from the Fed's Board of Governors. Cook confirmed that she does not plan to leave and will continue to fulfill her duties.
Nevertheless, USD/CHF growth may face obstacles, as the Swiss franc could strengthen amid increased demand for safe-haven assets due to rising concerns over the Fed's independence. In addition, the US dollar may come under pressure as market participants suggest that the potential resignation of Fed Chair Lisa Cook could increase the chances of an earlier rate cut, given the ongoing pressure from Trump on the central bank to lower borrowing costs.
Last week, Fed Chair Jerome Powell, at the Jackson Hole symposium, noted that risks to the labor market are rising, but also emphasized that inflation remains a significant threat and that a final decision has not yet been made. Therefore, for a clearer picture, traders should pay attention to upcoming annual US GDP data for the second quarter, which will be released on Thursday, and the July Personal Consumption Expenditures Price Index on Friday, viewed by the Fed as the preferred inflation indicator.
On the Swiss side of the pair, the annual employment level increased by 0.6%, reaching 5.532 million people in the second quarter, which matches the pace of the previous period. Inflation remains below the Swiss National Bank's (SNB) 2% target, strengthening expectations for further rate cuts, possibly into negative territory.
In addition, the recently introduced 39% tariff on Swiss imports by the United States will put significant pressure on Switzerland's export-oriented economy, increasing pressure on the Swiss National Bank (SNB) and encouraging further policy easing. Nevertheless, last week, the Swiss government announced plans to intensify efforts to enhance the country's attractiveness as a business hub, including measures to reduce regulatory burdens and delay the introduction of costly new regulations.
From a technical perspective, since prices this week have been unable to consolidate above the 200-SMA on the four-hour chart, this indicates bull weakness. Moreover, oscillators on the same chart remain negative. On the daily chart, prices are also below the 9-day EMA, confirming bull weakness, but oscillators are now neutral.
