Quiet consolidation was seen in North American trading, as the 1.2155 London lows were retested and held mid-morning in New York following a 1.2165 open. A pullback in US 10-yr Tsy yields from a failed attempt to displace Friday's 5.206% recovery high kept USD/CHF on a soft footing as did lingering expectations of future SNB rate hikes in the wake of Friday's report that Swiss Unemployment fell to 2.7% in June from 2.8% in May, better than the unchanged forecast.
CHF 3-mo LIBOR inched up to 2.72% Monday from 2.71% Friday as the market tries to guess if the SNB will hike rates before their September meeting or perhaps opt for a 50 bp hike at that meeting instead of the 25 bp already priced in. It is suspected that much will depend on how strong the franc is then, with greater leeway to hike if the franc weakens in the interim and vice versa. 1.2235 remains the nearby upside obstacle, with offers seen ahead of there and stops beyond. 1.2155 is a 61.8% Fibo support beside intraday lows.
Little first-tier US economic is due out until Thursday's May trade deficit and Friday's June Retail Sales.
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