Swiss Franc loses ground upbeat US Nonfarm Payrolls
USD/CHF trades higher on Friday as stronger-than-expected United States (US) Nonfarm Payrolls (NFP) data trigger fresh volatility. The pair jumped to 0.8126 following the release before giving back part of its advance. At the time of writing, USD/CHF trades around 0.8102, up nearly 0.34% on the day.
On Friday, the US Dollar (USD) gained strength against the Swiss Franc (CHF) after surpassing expectations in the United States Nonfarm Payrolls (NFP) data. USD/CHF jumped to 0.8126 before pulling back, trading around 0.8102 by the time of writing, marking a near 0.34% increase for the day. NFP rose by 162K in August, exceeding expectations of a 56K increase.
July's reading was revised higher to a 21K gain, while June payrolls were revised to 31K from 20K. The Unemployment Rate remained steady at 4.1%. The US Dollar Index (DXY) also climbed, reaching 99.15 after hitting 99.39 following the data release. This strong employment report has raised expectations of a Federal Reserve (Fed) rate hike at the September 15-16 meeting, with markets now forecasting a 60% chance of a 25-basis-point increase.
President Donald Trump praised the data, stating it was a "great jobs number" and urging for lower borrowing costs. The USD's inability to maintain its initial gains indicates ongoing uncertainty regarding the Fed's monetary policy direction. While the robust jobs report bolsters the case for a September rate hike, recent data point to moderating inflation.
The Swiss National Bank (SNB), with inflation remaining subdued, can keep its policy rate at 0% for an extended period, which may limit sustained upside for the Swiss Franc (CHF) in the coming quarters.
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