USD/CHF retraces intraday losses near 0.9100 on higher US Dollar

USD/CHF trades higher near 0.9100 due to stronger US Dollar.

The Palestine-Israel conflict could elevate demand for the safe-haven Swiss Franc.

Positive employment data in the United States bolsters the strength of the US Dollar (USD).

USD/CHF retraces its almost intraday losses, trading around 0.9100 during the Asian session on Monday. The pair faced downward pressure due to the Palestine-Israel military conflict. Additionally, US Nonfarm Payrolls data unveiled on Friday failed to underpin the USD/CHF pair.

The jobs report for September revealed a notable increase of 336,000 jobs, surpassing the market expectation of 170,000. The revised figure for August stood at 227,000. However, US Average Hourly Earnings (MoM) remained steady at 0.2% in September, falling short of the expected 0.3%. On an annual basis, the report indicated a decline of 4.2%, below the anticipated consistent figure of 4.3%.

The ongoing military conflict in the Middle East between Hamas and Israel is being closely watched by the markets. The worry is that the conflict could intensify and extend to other parts of the region, introducing geopolitical uncertainties that might have repercussions on global markets.

The escalation of violence has the potential to prompt investors to seek refuge in traditional safe-haven assets, with Swiss Franc (CHF) being a notable example. During periods of heightened geopolitical uncertainty, there tends to be an increased demand for safe-haven assets, and CHF is often viewed as a less risky asset in such situations.

The US Dollar Index (DXY) has bounced back after three consecutive days of losses, propelled by the upbeat US Treasury yields. The spot trades around 106.30 at the time of writing.

US Treasury yields rebounded, triggered by expectations of the Federal Reserve (Fed) maintaining higher interest rates for a prolonged period. The 10-year US Treasury bond yield has once again stood at 4.80% near its peak since 2007, by the press time.

Investors are expected to keep a close eye on the upcoming International Monetary Fund (IMF) meeting, where discussions will revolve around strategies for stabilizing international exchange rates and promoting development.

Furthermore, there could be a keen focus on the US Core Producer Price Index later in the week, as it holds a pivotal role in assessing inflationary trends and economic conditions within the United States.