- USD/CHF defensive near 0.9070 in the early European session.
- A softer US dollar prompts recent pullback in the pair.
- Swiss employment and US NFP eyed.
The USD/CAD pair seems vulnerable to the downside, as it holds onto the multi-month lows near 0.9070 in the early European session. The depreciative move in the greenback held responsible for the pair’s muted performance.
At the time of writing, USD/CAD is trading at 0.9073, up 0.04% on the day.
The US dollar index (DXY), which tracks the movement of the USD against its rivals, pauses the downward slide near 90.80 after tracking recent traction in US Treasury yields with gains of 0.44% on Friday ahead of the US Non Farm Payrolls Data (NFP).
On the other hand, the Swiss franc benefited on the back of optimism of economic data released this week with recent higher CPI figures and an improved Consumer Sentiment Index, followed by the upgraded economic outlook by the KOF Swiss Economic Institute on Friday. This could be translated into an expectation of higher interest rates in the near term, making CHF an attractive investment to investors.
On the other hand, Fed officials downplayed the inflationary risk and were not in a mood to change the highly accommodative monetary policy any time soon. This, in turn, kept the gains limited for the greenback.
As for now, investors eagerly await the release of the Swiss Unemployment Rate for April and, above all, the US Non Farm Payrolls data for fresh trading impetus.
