• US employment contracts in February, raising concerns about the economic outlook.
• Rising geopolitical tensions in the Middle East boost demand for safe-haven assets.
• The Swiss Franc strengthens while the SNB reiterates its readiness to limit excessive currency appreciation.

USD/CHF declines on Friday, trading around 0.7780 at the time of writing, down 0.44% on the day, as the Swiss Franc (CHF) benefits from increased safe-haven demand amid economic and geopolitical uncertainty.

The latest data released by the Bureau of Labor Statistics (BLS) surprised markets to the downside. Nonfarm Payrolls (NFP) declined by 92K jobs in February, sharply missing expectations for a 59K increase. The previous month’s figure was also revised lower to 126K. At the same time, the Unemployment Rate rose to 4.4% from 4.3%, while the Labor Force Participation Rate edged down to 62%.

Wage growth, however, remains relatively firm. Average Hourly Earnings increased by 0.4% MoM and by 3.8% YoY, complicating the outlook for the Federal Reserve (Fed), which must balance signs of labor market cooling with still-elevated wage pressures.

In addition, US Retail Sales declined by 0.2% MoM in January, confirming a gradual slowdown in consumer spending and reinforcing concerns about the resilience of domestic demand.

On the geopolitical front, tensions in the Middle East intensified after US President Donald Trump stated that there would be “no deal with Iran except unconditional surrender”, increasing global risk aversion. Against this backdrop, the US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades flat on Friday near 99.00, reflecting a balance between weak economic data and safe-haven flows.

The Swiss Franc benefits from this cautious environment. Meanwhile, Swiss National Bank (SNB) Vice-President Antoine Martin reiterated that the central bank remains ready to intervene in foreign exchange markets to prevent excessive appreciation of the Swiss currency.