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Swiss franc strengthens against dollar after weak US payrolls

USD/CHF was about 0.8080 after the US Nonfarm Payrolls print, and Fed hike odds for September fell to around 42% from 54% immediately before the data.

Reported · Written up by our desk · Major Pairs

FXStreet reports USD/CHF edged lower on Friday as the US dollar weakened following a downside surprise in the US Nonfarm Payrolls report. At the time of writing, the pair traded around 0.8080, down 0.53% on the day, after giving back much of the prior session’s gains.

The US economy lost 23K jobs in July versus an 80K increase expected, and June’s employment gain was revised down to 20K from 57K. The US unemployment rate fell to 4.1% from 4.2%, while the US Dollar Index, which tracks the greenback versus six major currencies, was around 99.60, down nearly 0.33%.

Following the report, the probability of a Federal Reserve rate hike at the September meeting dropped to about 42% from 54% right before the release, according to the CME FedWatch Tool. Traders are looking to next week’s US Consumer Price Index report for further clues on the inflation outlook.

Even with the move, analysts at OCBC said the broader Swiss franc outlook remains weak, citing growing carry-trade funding demand and a view that the Swiss National Bank appears comfortable with a weaker currency. OCBC also noted carry-trade funding pressures continue to weigh on the CHF and that recent JPY intervention may have reinforced the franc’s role as a preferred funding currency.

Latest closeDollar index 99.98 ▲0.3%

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