Key Moments:
- USD/CHF traded around 0.8210 in Asian hours, rising for a third straight session.
- October U.S. Nonfarm Payrolls increased by 165,000, far above the 65,000 consensus.
- CME FedWatch showed the probability of a 25-basis-point Fed hike exceeding 78%.
USD/CHF Extends Rally but Faces Potential Headwinds
USD/CHF continued to climb for a third consecutive day, trading near 0.8210 during Asian trading on Monday. The pair’s upward momentum followed reports that October U.S. Nonfarm Payrolls rose by 165,000, substantially surpassing expectations.
Despite the recent advance, the upside in USD/CHF could be constrained as the U.S. Dollar may encounter pressure from lower crude oil prices. Softer energy costs tend to alleviate inflationary pressures, which can dampen the case for aggressive monetary tightening.
Energy markets retreated after U.S. President Donald Trump indicated that further military action against Iran is “highly unlikely,” conditional on continued progress on Iran’s nuclear program and the Strait of Hormuz remaining open. Trump also noted that the unpopular conflict in the Middle East, which had previously pushed energy prices higher, was a major factor in Republicans’ losses in the recent midterm elections.
Labor Market Strength Supports Hawkish Fed Expectations
The U.S. Dollar stands to benefit from firm labor market data and rising expectations of additional policy tightening. Based on the CME FedWatch tool, the implied probability of a 25-basis-point rate increase at the December Federal Open Market Committee (FOMC) meeting moved above 78%.
Hawkish sentiment toward the Federal Reserve has been reinforced by solid employment indicators. October Nonfarm Payrolls climbed by 165,000, decisively overshooting the 65,000 market forecast and building on September’s revised 60,000 print. The Unemployment Rate eased to 4.1%, improving on the projected 4.2% reading.
Market participants are now watching Tuesday’s Consumer Price Index (CPI) release and Friday’s Producer Price Index (PPI) data for further clarity on the Fed’s upcoming policy decisions.
Political Shifts May Bolster Safe-Haven Demand for CHF
While recent data has lent support to the U.S. Dollar, USD/CHF may face downside risks as the Swiss Franc could attract safe-haven inflows. The Democratic sweep raised concerns about tighter regulation of the AI buildout, as well as the potential for political stalemate and an increased likelihood of fiscal restraint in the United States. These developments could underpin demand for CHF and weigh on the currency pair.
UOB: Further USD/CHF Weakness Possible Before Recovery
Strategists at UOB Group remain cautious on USD/CHF from a medium-term perspective, stating that their “update from yesterday (05 Nov, spot at 0.8165) remains valid.” They continue to highlight room for additional downside, observing that “there is a chance for USD to test 0.8110 before the risk of a recovery increases.”
On the upside, UOB points to a key resistance area, noting that “a breach of 0.8205 (no change in ‘strong resistance’) would mean that the USD decline from one week ago has run its course,” identifying that level as the critical marker that would indicate the end of the recent downtrend.
Swiss Franc Performance Against Major Currencies
The Swiss Franc underperformed several peers, with the currency described as weakest versus the New Zealand Dollar. The table below summarizes the percentage change of the Swiss Franc against major currencies today.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.16% | -0.21% | -0.17% | -0.16% | -0.37% | -0.89% | -0.03% | |
| EUR | 0.16% | -0.05% | 0.00% | -0.01% | -0.21% | -0.73% | 0.13% | |
| GBP | 0.21% | 0.05% | 0.06% | 0.04% | -0.16% | -0.68% | 0.18% | |
| JPY | 0.17% | 0.00% | -0.06% | -0.00% | -0.20% | -0.73% | 0.14% | |
| CAD | 0.16% | 0.00% | -0.04% | 0.00% | -0.20% | -0.72% | 0.14% | |
| AUD | 0.37% | 0.21% | 0.16% | 0.20% | 0.20% | -0.52% | 0.34% | |
| NZD | 0.89% | 0.73% | 0.68% | 0.73% | 0.72% | 0.52% | 0.86% | |
| CHF | 0.03% | -0.13% | -0.18% | -0.14% | -0.14% | -0.34% | -0.86% |
The accompanying heat map framework shows percentage moves of major currencies relative to one another. The base currency is selected from the left column, and the quote currency from the top row. For instance, selecting the Swiss Franc in the left column and moving horizontally to the U.S. Dollar column yields the percentage change for CHF (base)/USD (quote).
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