The USD/CHF pair is currently positioned in positive territory at approximately 0.7960 during the early European session on Wednesday, supported by a rebound in the US Dollar. However, the potential for a US Federal Reserve interest rate cut next year may exert downward pressure on the Greenback relative to the Swiss Franc. The Swiss National Bank is set to release its Quarterly Bulletin for the fourth quarter later today. Additionally, New York Fed President John Williams and Atlanta Fed President Raphael Bostic are scheduled to deliver remarks.
USD/CHF moves upward to 0.7960 during the early European session on Wednesday. A rise in the US Unemployment Rate has intensified the pressure on the Fed to intervene in the labor market through interest rate cuts. In times of uncertainty and a prevailing risk-off sentiment, we may observe an increase in demand for safe-haven assets such as the Swiss Franc.
Data released on Tuesday indicated that the labor market continued to exhibit softness, causing investors to remain apprehensive regarding the timing of the next potential rate cut. The US Nonfarm Payrolls increased by 64,000 in November, in contrast to a decline of 105,000 in October. This figure exceeded the estimates of 50,000. Meanwhile, the Unemployment Rate in the US increased to 4.6% in November, up from 4.4% in October. Federal Reserve officials are divided on the necessity of additional monetary policy easing in the upcoming year. The median Federal Reserve official projected only a single reduction in 2026, while certain policymakers anticipate no additional cuts.
The potential for US military action in Venezuela, coupled with prevailing uncertainty, may enhance safe-haven flows, thereby bolstering the Swiss Franc. On Tuesday evening, US President Donald Trump issued an order to impose a blockade on all sanctioned oil tankers that are entering and exiting Venezuela, according to sources. Following the detention of a supertanker by the Trump administration last week, Washington has initiated a significant increase in US military forces stationed off the Venezuelan coast, with the operation reportedly aimed at combating drug smuggling.