USD/CHF spent the European morning looking supported oin dips while sales in EUR/CHF offset the potential for further gains. Into North American trading and USD/CHF is attempting to consolidate the break back into the 1.25's but dealers still see thick offers from 1.2545 back to 1.2600/05.Looking ahead, US data is set for release at 15:00 GMT.
January Non-Manf. ISM data is the key short-term event-risk for USD/CHF and economists currently opt for a 57.0 reading. Risk is skewed on the downside after the soft manf. data so a weak headline will place the sub-1.2465 & 50 under pressure. Domestic players look to the Swiss data set for release later in the week. In the wake of the Roth avoidance of the monetary policy issue, in his most recent speech, dealers are awaiting a hard data fix.
Should the data point to the need for more aggressive tightening then expect the Franc to rally/correct further but should it only point to the need for a more moderate 25bp hike; then the status quo will be maintained and expect the CHF outlook to look little altered in the longer-term.
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