FX.co ★ Der | USD/CHF

The U.S. dollar maintained a firm posture against the Swiss franc at the inception of Friday’s European trading session, gravitating toward the 0.7700 level as market participants recalibrated their expectations for the Federal Reserve’s upcoming policy trajectory. This bullish momentum for the greenback is primarily rooted in a "higher-for-longer" narrative that has gained fresh legs following a blowout January employment report. Data from the Bureau of Labor Statistics revealed that the U.S. economy added a robust 130,000 non-farm jobs in January, nearly doubling the consensus forecast of 70,000. This hiring surge was accompanied by a slight dip in the national unemployment rate to 4.3%, effectively dispelling immediate fears of a labor market downturn following the brief government shutdown earlier in the month. For currency traders, this resilience serves as a green light for the Federal Reserve to maintain its current restrictive stance, as the urgency for immediate monetary stimulus has significantly diminished. The shift in market sentiment is vividly reflected in the CME FedWatch Tool, which now prices in a staggering 92% probability that the Federal Open Market Committee will keep interest rates anchored at the 3.50% to 3.75% range at its next gathering. While traders have toyed with the idea of a June pivot—assigning those odds a value above 60%—the immediate focus has pivoted toward "sticky" inflationary pressures. On Friday, the release of the core Personal Consumption Expenditures (PCE) price index—the Fed’s preferred inflation metric—showed a year-on-year increase of 3.0%, surpassing expectations. This data point, combined with the strong payroll numbers, provides a formidable tailwind for the dollar, as it suggests that the "last mile" of disinflation in the United States is proving to be the most difficult. In this environment, the yield advantage remains firmly in the dollar’s favor, especially when contrasted with the Swiss National Bank’s 0% interest rate policy. In Switzerland, the macroeconomic landscape remains characterized by low-growth and low-inflation dynamics, which historically enhances the francs appeal as a safe haven but limits its carry-trade potential. Januarys Swiss Consumer Price Index (CPI) arrived in line with expectations at a mere 0.1% year-on-year, placing it at the bottom end of the SNB’s 0–2% target range. While a higher-than-expected inflation print could have sparked a short-term rally for the franc by raising the prospect of an SNB policy shift, the current data suggests the central bank will remain on the sidelines throughout much of 2026. This lack of domestic domestic "hawkish" fire, paired with the volatility stemming from U.S.-Iran tensions, has left the USD/CHF pair in a state of consolidation with an upward bias. Technically, if the pair can decisively reclaim the 0.7750 resistance, it may open the door for a test of the 50-day moving average near 0.7830. Conversely, should geopolitical fears intensify further, the franc could see a renewed surge in demand, dragging the pair back toward the mid-February support floor near 0.7600.