The USD/CHF exhibits strength near 0.7700 during the early European session on Friday. In January, US job growth exhibited an unexpected acceleration, which has moderated expectations for further rate cuts by the Federal Reserve. Market participants are expected to draw additional insights from the inflation data released for Switzerland and the United States on Friday. The USD/CHF pair trades in positive territory near 0.7700 during the early European session on Friday.
Increasing expectations that the US Federal Reserve will maintain interest rates in the near term lend support to the Greenback against the Swiss Franc. Market participants prepare for the release of the Consumer Price Index inflation reports from Switzerland and the United States later on Friday. In January, US Nonfarm Payrolls experienced an increase of 130,000, surpassing the anticipated figure of 70,000, as reported by the Bureau of Labor Statistics on Wednesday. The Unemployment Rate declines to 4.3% during the same period.
The positive jobs report alleviates worries regarding the condition of the US labor market and diminishes the likelihood that the US central bank will implement further interest rate cuts by midyear. The CME FedWatch tool indicated that markets are currently assigning approximately a 92% probability to the Federal Reserve maintaining its interest rates at the upcoming meeting, while the likelihood of a rate reduction in June has risen to nearly 50%.
On Friday, attention will be focused on the Swiss inflation data. The Consumer Price Index is anticipated to reflect a year-over-year increase of 0.1% in January. Should the report indicate a stronger than anticipated result, this may enhance the CHF’s position relative to the US Dollar in the short term.