- Sustained buying interest around the dollar pushes USD/CHF to a fresh multi-week high on Friday.
- Cautious market sentiment supports the safe haven CHF and caps the pair’s upside.
- Furthermore, investors are reluctant to open aggressive positions ahead of the release of the US NFP jobs report.
The pair USD/CHF has extended its recent strong bounce from levels below 0.9500 and has gained some traction for the seventh day in a row on Friday. The pair has reached three-week highs during the first half of the European session, although it has stopped just before the 0.9800 level.
After the brief pause the day before, the US dollar was once again in demand and soared to a new two-decade high amid the expectations of more aggressive Fed rate hikes. Market expectations were bolstered by minutes from the June 14-15 FOMC meeting, released on Wednesday, which indicated that another rate hike of 50 or 75 basis points was likely at the July meeting. This, in turn, was seen as a key factor that continued to drive the USD/CHF pair higher and contributed to the current positive move.
Nevertheless, cautious equity markets offered some support to the safe-haven Swiss franc and capped USD/CHF gains, at least for now. Investors also seemed reluctant to take aggressive positions and might prefer to wait for Friday’s release of monthly US jobs data. The popularly known NFP report will play a key role in influencing the short-term USD price dynamics and will provide a further directional boost to the pair.
The US economy is expected to have added 268,000 jobs in June, compared to 390,000 the previous month. Meanwhile, the unemployment rate is expected to hold steady at 3.6% during the reported month. Any significant divergence from forecasts would instill some volatility in financial markets. This, in turn, will drive demand for the dollar and produce short-term opportunities around the USD/CHF pair on the last day of the week.
USD/CHF technical levels
Source: Fx Street
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