• The US Dollar stabilizes against the Swiss Franc amid caution ahead of US employment data.
• The Swiss Franc remains in demand as geopolitical tensions continue to fuel risk aversion.
• The latest Swiss inflation figures reinforce the Swiss central bank’s wait-and-see stance on interest rates.

USD/CHF trades without a clear direction on Friday, with the current price hovering around 0.8000, virtually unchanged on the day after three consecutive days of gains. The pair pauses as the Swiss Franc (CHF) continues to benefit from safe-haven demand in a still-uncertain geopolitical environment.

Risk aversion remains underpinned by comments from US President Donald Trump, who warned that Washington would respond forcefully if Iranian authorities were to use lethal force against protesters. These remarks add to other international flashpoints, encouraging investors to maintain defensive positioning, which supports the Swiss Franc.

On the macroeconomic front, the latest Swiss inflation data eased pressure on the Swiss National Bank (SNB) to further loosen monetary policy. The Consumer Price Index (CPI) is unchanged MoM in December, following a decline in November, and comes in above market expectations. On an annual basis, inflation reaches 0.1%, in line with forecasts, suggesting that fourth-quarter price dynamics remain consistent with the central bank’s projections.

The minutes of the SNB’s December meeting confirm this cautious approach. Policymakers see no urgency to adjust monetary policy, keeping the key interest rate at 0% and judging that a move into negative territory could heighten risks to the financial system. The institution also points to a gradual improvement in the economic outlook and a steady rise in inflation.

On the US side, the US Dollar (USD) finds moderate support as investors await the employment report. Market participants remain cautious ahead of the release of the Nonfarm Payrolls (NFP) data due later in the day, which is expected to provide further insight into labor market conditions and the next steps of the Federal Reserve (Fed). The consensus points to a slight slowdown in job creation compared with the previous month, and any upside surprise could offer additional support to the Greenback against the Swiss Franc.