- USD/CHF drifts lower for the third straight day and drops to over a two-week low on Friday.
- Reduced bets for more aggressive rate hikes by the Fed weigh on the USD and exert pressure.
- The risk-off mood underpins the safe-haven CHF and contributes to the heavily offered tone.
- Investors now look forward to the crucial US NFP report for some meaningful opportunities.
The USD/CHF pair prolongs this week's retracement slide from the 0.9435-0.9440 supply zone and continues losing ground for the third successive day on Friday. The pair maintains its heavily offered tone heading into the North American session and is currently placed around the 0.9270-0.9265 region, or over a two-week low.
Reduced bets for a more aggressive policy tightening by the Federal Reserve (Fed) drag the US Dollar further away from a three-month high touched on Wednesday, which, in turn, is seen exerting downward pressure on the USD/CHF pair. A larger-than-expected rise in the US Weekly Jobless Claims was seen as the first sign of a softening labor market and forced investors to re-evaluate the possibility of a jumbo 50 bps lift-off at the upcoming FOMC meeting on March 21-22. This leads to a further decline in the US Treasury bond yields and continues to weigh on the Greenback.
Apart from this, the prevalent risk-off environment - as depicted by a sea of red across the global equity markets - benefits the safe-haven Swiss Franc (CHF) and further contributes to the offered tone surrounding the USD/CHF pair. Fed Chair Jerome Powell's hawkish comments earlier this week, saying that the US central bank was prepared to quicken the pace of rate hikes to tame inflation, fueled worries about economic headwinds stemming from rising borrowing costs. Furthermore, fading hopes for a strong economic recovery in China temper investors' appetite for riskier assets.
The USD selling, meanwhile, seems to have abated, at least for the time being, as traders now look forward to the release of the closely-watched US monthly jobs report. The popularly known NFP report will provide a fresh insight into the US labor market conditions. This, along with the latest US consumer inflation figures, due next Tuesday, will influence the Fed's policy outlook, which, in turn, should drive the USD demand. Apart from this, the broader risk sentiment should help traders to determine the next leg of a directional move for the USD/CHF pair.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds ground above 1.1700 amid softer US Dollar
EUR/USD holds ground above 1.1700 in the European session on Thursday. The pair stays supported as the US Dollar faces headwinds from lingering US tariffs and economic concerns. Attention turns to central bank talks and mid-tier US data for fresh trading impetus.
Cardano bulls eye for a rally as Bitcoin hits new record highs
Cardano price stabilizes trading at around $0.62 on Thursday after breaking out of a falling wedge pattern the previous day. This bullish breakout comes as Bitcoin reaches new all-time highs, fueling a wave of optimism for ADA and the overall cryptocurrency market.
GBP/USD stays well bid above 1.3600 as US Dollar continues to sag
GBP/USD trades with moderate gains above 1.3600 in European trading on Thursday. The US Dollar softens against the Pound Sterling amid growing uncertainty around the impact of Trump's tariffs on the economy and the Fed's interest rate outlook. Fedspeak and US data are awaited.
Gold price builds on steady intraday ascent amid softer USD, trade worries
Gold price is building on the overnight bounce from a one-and-a-half week low and gaining positive traction for the second straight day on Thursday. Investors remain on edge amid uncertainties surrounding US President Donald Trump's erratic trade policies and their impact on the global economy.
New US tariffs target Asia, but some countries stand to gain
President Trump’s new tariffs are higher than expected for most Asian economies. Moreover, most countries will face additional tariff rates on transshipments. The new announcements are silent on Singapore, India and the Philippines, which might stand to benefit from tariff concessions if negotiations progress favourably.
Best Brokers for EUR/USD Trading
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.