The USD/CHF pair declined slightly after Switzerland boosted its recovery forecast. It declined to 0.8965 as investors start focusing on the upcoming US data and Fed decision.
The Swiss economy is expected to record a strong recovery as the global economy bounces back and as the country reopens.
As stated by a government committee, the economy is expected to bounce back by 3.6% in 2021, up from the previous estimate of 3.0%. It also expects the economy to rise by 3.3% in 2022.
The committee attributed this recovery to the continuing vaccination drive that has seen many people in Switzerland get vaccinated. Also, the ongoing recovery of the global economy will help the country recover since Switzerland makes a substantial amount of its income from exports. The report said:
“The continuing recovery is due to have a considerable impact on the labor market, with employment rising significantly (+1.5 %) and the unemployment rate falling further to an annual average of 2.8 % (March forecast: 3.0 %).”
The USDCHF pair dropped as investors waited for the upcoming economic data from the United States and the Federal Reserve interest rate decision. On Tuesday, the US will publish the latest retail sales and producer price index (PPI) data. Analysts expect the overall retail sales declined slightly in May while the producer price index (PPI) rose to more than 6%. On Monday, data from Switzerland showed that the country’s PPI rose by 3.2% in May.
The biggest catalyst for the USD/CHF will be the Federal Reserve interest rate decision that will come out today, Wednesday. Analysts expect the bank to leave interest rates and quantitative easing unchanged and pledge to continue with the easing cycle.
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