USD/CHF climbs to two-week highs as US Dollar firms ahead of delayed NFP

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USD/CHF advances for the fifth consecutive day on Thursday, with the pair drawing strong support from broad US Dollar (USD) strength as markets position cautiously ahead of the delayed September Nonfarm Payrolls (NFP) report due at 13:30 GMT.

USD/CHF extends its recovery, supported by stronger Dollar demand before the delayed September NFP.
Traders scale back December Fed cut expectations after hawkish-leaning FOMC Minutes and BLS data delays.
Swiss Franc struggles despite supportive October trade data, with focus shifting to SNB Chairman Schlegel’s remarks due Friday.

At the time of writing, USD/CHF is trading around 0.8073, its highest level in nearly two weeks, as the Swiss Franc (CHF) remains on the defensive.

The Greenback’s upward momentum is being driven by a reassessment of the Federal Reserve’s (Fed) near-term monetary policy outlook. Markets are now less confident about a December rate cut, with the CME FedWatch Tool showing only a 31.8% chance, down from around 50% a week ago.

A key factor behind the recent repricing was the postponement of the October Employment Situation Report, after the US Bureau of Labor Statistics (BLS) confirmed on Wednesday that the government shutdown prevented officials from collecting critical data. The missing October figures will now be published together with the November jobs report on December 16, which limits the amount of labour-market information available to the Fed ahead of its December 9-10 Federal Open Market Committee (FOMC) meeting.

The October FOMC Meeting Minutes further supported the Dollar’s tone, showing a hawkish tilt among participants. Policymakers noted that inflation had moved higher earlier in the year and remained above the 2% target, while progress toward disinflation had stalled. Many participants argued that further rate cuts may not be appropriate in December.

However, the upcoming batch of delayed US data could prove pivotal and may help reshape market expectations. Economists forecast September NFP to rise by around 50K, marking an improvement from the modest 22K increase seen in August.

In Switzerland, the latest trade figures were broadly supportive, with October data showing a solid rise in both exports and imports. However, the upbeat numbers have had limited impact on the Swiss Franc, as broader FX flows remain dominated by US Dollar strength.

Traders now turn their attention to comments from SNB Chairman Martin Schlegel, who is scheduled to speak on Friday and may offer fresh clues on the policy outlook. The Swiss National Bank (SNB) will deliver its next interest rate decision in December, with analysts widely expecting the central bank to keep rates unchanged at 0%.

SNB FAQs

What is the Swiss National Bank?

The Swiss National Bank (SNB) is the country’s central bank. As an independent central bank, its mandate is to ensure price stability in the medium and long term. To ensure price stability, the SNB aims to maintain appropriate monetary conditions, which are determined by the interest rate level and exchange rates. For the SNB, price stability means a rise in the Swiss Consumer Price Index (CPI) of less than 2% per year.

How does the Swiss National Bank interest-rate policy affect the Swiss Franc?

The Swiss National Bank (SNB) Governing Board decides the appropriate level of its policy rate according to its price stability objective. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame excessive price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.

Does the Swiss National Bank intervene in the forex market?

Yes. The Swiss National Bank (SNB) has regularly intervened in the foreign exchange market in order to avoid the Swiss Franc (CHF) appreciating too much against other currencies. A strong CHF hurts the competitiveness of the country’s powerful export sector. Between 2011 and 2015, the SNB implemented a peg to the Euro to limit the CHF advance against it. The bank intervenes in the market using its hefty foreign exchange reserves, usually by buying foreign currencies such as the US Dollar or the Euro. During episodes of high inflation, particularly due to energy, the SNB refrains from intervening markets as a strong CHF makes energy imports cheaper, cushioning the price shock for Swiss households and businesses.

When does the Swiss National Bank Governing Council decide on monetary policy?

The SNB meets once a quarter – in March, June, September and December – to conduct its monetary policy assessment. Each of these assessments results in a monetary policy decision and the publication of a medium-term inflation forecast.