How is the Fed’s hawkish outlook lifting USD/CHF and weighing on the Swiss Franc?

Gains in USD/CHF followed reports of a 165,000 rise in October US Nonfarm Payrolls, well above market expectations.
The likelihood of a 25-basis-point Fed rate hike stands above 78%, according to CME FedWatch.
Concerns over tech regulation and US fiscal gridlock following Democratic victories could support the Swiss Franc.

A third straight day of gains has taken USD/CHF to around 0.8210 in Monday's Asian session, though falling crude oil prices could weigh on the Greenback and cap the pair's advance. Cheaper oil helps moderate inflationary pressures. The retreat in energy markets followed US President Donald Trump's indication that additional military action against Iran is "highly unlikely," provided progress on Iran's nuclear programme continues and the Strait of Hormuz stays open. Trump also acknowledged the significant role played in the Republicans' recent midterm election defeats by the unpopular Middle East conflict, which had earlier pushed energy costs higher.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Strong labour market figures and rising expectations of monetary tightening could help the US Dollar (USD) recover its footing. The CME FedWatch tool puts the probability of a 25-basis-point interest rate increase at the December Federal Open Market Committee (FOMC) meeting at more than 78%, following a sharp rise.

Robust US jobs data have reinforced expectations of a hawkish Fed stance. Against a consensus forecast of 65,000, October Nonfarm Payrolls (NFP) increased by 165,000, following September's revised reading of 60,000. Meanwhile, the Unemployment Rate fell to 4.1%, below the 4.2% forecast. For clearer signals on the Federal Reserve's next policy steps, investors and other market participants are shifting their attention to Tuesday's Consumer Price Index (CPI) report and Friday's Producer Price Index (PPI) release.

Greater demand for safe havens could lend support to the Swiss Franc (CHF), potentially pulling USD/CHF lower. The Democratic sweep has fuelled expectations of tighter regulation of the AI buildout, while also raising the possibility of political gridlock and fiscal restraint in the US.

Can USD/CHF Recover as UOB Highlights Persistent Downside Risks?

A cautious medium-term view on USD/CHF remains in place at UOB Group, whose strategists reiterate that their “update from yesterday (05 Nov, spot at 0.8165) remains valid.” Further weakness remains possible, with the strategists observing that “there is a chance for USD to test 0.8110 before the risk of a recovery increases.” For an upside signal, UOB identifies 0.8205 as the decisive threshold for the end of the recent downtrend, stressing that “a breach of 0.8205 (no change in ‘strong resistance’) would mean that the USD decline from one week ago has run its course,”

How Is the Swiss Franc Performing Today?

The Swiss Franc (CHF) recorded its weakest performance against the New Zealand Dollar today. Its percentage changes against the major currencies listed are set out in the table below.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.16%	-0.21%	-0.17%	-0.16%	-0.37%	-0.89%	-0.03%
EUR	0.16%		-0.05%	0.00%	-0.01%	-0.21%	-0.73%	0.13%
GBP	0.21%	0.05%		0.06%	0.04%	-0.16%	-0.68%	0.18%
JPY	0.17%	0.00%	-0.06%		-0.00%	-0.20%	-0.73%	0.14%
CAD	0.16%	0.00%	-0.04%	0.00%		-0.20%	-0.72%	0.14%
AUD	0.37%	0.21%	0.16%	0.20%	0.20%		-0.52%	0.34%
NZD	0.89%	0.73%	0.68%	0.73%	0.72%	0.52%		0.86%
CHF	0.03%	-0.13%	-0.18%	-0.14%	-0.14%	-0.34%	-0.86%

Percentage movements between major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, selecting the Swiss Franc on the left and following its row across to the US Dollar gives the percentage change for CHF (base)/USD (quote) in the corresponding cell.