Swiss Franc Gains as US Economic Data Disappoints
The US economic data released in July failed to meet expectations, causing the Swiss Franc to gain against major currencies. The ADP Employment Change rose by only 44K in July, missing forecasts of 70K and slowing from 98K in June. Meanwhile, the ISM Services Purchasing Managers Index (PMI) edged up to 54.1 from 54.0 but fell short of the 54.5 market forecast.
The disappointing data has reduced expectations that the Federal Reserve (Fed) will raise interest rates this year. According to the CME FedWatch Tool, markets now price in around a 56% chance of a September rate hike, down from 67% a day earlier.
Oil prices remain under pressure as hopes build that commercial shipping through the Strait of Hormuz could resume soon. Iran and Oman have reached an understanding on the geographic coordinates of a proposed shipping route through the waterway, but an informed source notes that an agreement between Iran and Oman would not automatically reopen the Strait.