USD/CHF holds gains above 0.8040 with US GDP and the Fed on tap

• The US Dollar steadies near one-month highs against the Swiss Franc, consolidating gains after a 1.3% rally this week.
• Hopes of strong US ADP employment and preliminary GDP data are keeping the Dollar's downside attempts contained.
• Forex volatility remains subdued on Wednesday, with investors awaiting the US Fed monetary policy decision.

The US Dollar's reversal from one-month highs at 0.8075 against the Swiss Franc has been contained above 0.8040, with the pair consolidating gains after a 1.75% rally over the last three days. The Dollar remains buoyed by US trade deals with some of its main partners and solid macroeconomic figures, yet with investors awaiting the Fed release before placing directional bets.

Before the central bank's monetary policy decision, the US ADP employment and preliminary GDP releases are expected to remain on the same line. Private payrolls are seen increasing by 78,000 in June, while the US is forecast to return to growth, at a 2.4% annualised rate, following a 0.5% contraction in Q1.

These figures are likely to provide further justification for the Federal Reserve to keep pushing back rate cuts until the economic effects of tariffs are clear. The bank is widelñy expected to keep interest rates on hold, but Chairman Powell's press release will be carefully observed for clues about a September cut.
forecast to return

On the trade front, the latest round of talks between the US and China ended without significant advances, but the positive comments from both sides support the theory of an extension of the trade truce beyond the August 12 deadline. This is another source of support to the Greenback against the safe-haven Swiss Franc.