March 23, 2023

USD/CHF juggles below 0.9150 as investors await US NFP for fresh impetus

  • USD/CHF is oscillating in a narrow range below 0.9150 as volatility squeezes ahead of US NFP data.
  • The demand for US government bonds is accelerating as the street is considering continuation price index softening.
  • SNB Jordan has confirmed further interest rate hikes amid rising inflationary pressures.

The USD/CHF pair is displaying a lackluster action below 0.9150 in the early European session after a gradual upside move. The Swiss franc asset is struggling to extend gains as investors are avoiding making significant positions ahead of the release of the United States Nonfarm Payrolls (NFP) data.

After testing Thursday’s high around 101.55, the US Dollar Index (DXY) is facing fragile barriers in extending its upside journey. S&P500 futures are failing to ease losses recorded in the Asian session, portraying a risk-off market mood. The demand for US government bonds is accelerating as the street is considering a continuation of the slowdown in the price index. This has led to a drop in the 10-year US Treasury yields below 3.38%.

Friday’s price action banks upon the release of the US NFP data. Analysts at TD Securities expect a 220K increase in payroll and a modest increase in the Unemployment Rate to 3.6%.

The economic catalyst that will be keenly watched by the market participants will be the labor cost index data. As per the consensus, Average Hourly Earnings data is seen at 4.9% vs. the prior release of 4.6% on an annual basis. While monthly data is seen steady at 0.3%. Considering the fact that labor demand is exceeding the supply, higher negotiation power in favor of job seekers could dent the Consumer Price Index (CPI) declining trend. Households will be with higher purchasing power, which could trigger retail demand again.

On the Swiss franc front, Swiss National Bank (SNB) Chairman Thomas J. Jordan has confirmed further interest rate hikes as price pressures are beyond the tolerance power of the central bank.


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