USD/CHF keeps wavering around 0.8050, awaiting fundamental triggers

The US Dollar found support at 0.8025 on Wednesday, which leaves the pair trapped within the weekly range below 0.8890.
Investors are awaiting Fed Powell’s speech for more clues about the bank’s monetary policy plans.
The CHF is on the defensive as Swiss Trade Balance data highlights a weakening export activity.

The US Dollar reversal from Wednesday’s highs around 0.8090 against the Swiss Franc has been contained right above 0.8020, which leaves the pair moving back and forth within the 70-pip range where it has been trapped for more than seven days.

Investors are showing a cautious mood on Thursday, with volumes at relatively low levels. Later today, the US preliminary PMI and Jobless Claims figures might provide some guidance to the US Dollar. Still, the pair is unlikely to break the channel´s boundaries ahead of Fed Powell’s speech on Friday.

The Federal Reserve Chairman will speak at the Jackson Hole symposium amid renewed political pressure to lower interest rates. The market wants to see whether the weak labour market data seen earlier this week has convinced the Fed chief to consider a rate cut in September. Powell’s comments are likely to set the US Dollar’s near-term direction.

The Swiss Franc is on its back foot on Thursday, weighed down by uninspiring trade figures. The Swiss trade surplus narrowed to 4.59 billion in July from 5.79 billion in the previous month, led by a 2.7% decline in Exports ahead of the introduction of Trump’s trade tariffs.

Economic Indicator

Trade Balance

The Trade Balance released by the Federal Customs Administration is a measure of balance amount between import and export. A positive value shows a trade surplus while a negative value shows a trade deficit. Any variation in the figures influences the domestic economy. Generally speaking, if a steady demand in exchange for Swiss exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the CHF.

Economic Indicator

Exports (MoM)

Exports of goods and services, released by Federal Customs Administration, consist of transactions in goods and services (sales, barter, gifts or grants) from residents to non-residents.