The US Non-Farm Payrolls Data Is About To Be Released & USD/CHF Seems To Be In A Weak Position

USD/CHF edged higher in Asia on Friday, but approached key support at 0.8883. Swiss franc assets remained under pressure in the past few sessions as the dollar struggled to stabilize amid continued speculation that the Federal Reserve (Fed) would start cutting interest rates from its September meeting.

The firm expectation of a Fed rate cut in September has increased the appeal of risk assets. S&P 500 futures recorded solid gains in Asia. The US dollar index (DXY) remained around 104.00 ahead of the release of US May non-farm payrolls (NFP) data. The 10-year Treasury yield rebounded to 4.30%, but fell sharply from last week’s high of 4.62%.

Traders increased bets that the Fed will start cutting key borrowing rates from current levels in September as the labor market normalizes. This week, the JOLTS job openings data for April and the ADP employment change for May were weaker than expected, indicating that labor demand is slowing.

In addition, the number of initial jobless claims in the United States for the week ended May 31 was 229,000, higher than the expected value of 220,000 and the previous value of 221,000, which also added to the concerns that the strength of the labor market is easing. At today’s meeting, the US non-farm payrolls will provide important clues about the health of the US labor market.

Meanwhile, the Swiss franc has been relatively strong against the US dollar in the past few trading days due to market expectations that the Swiss National Bank (SNB) may intervene in the currency market to support the Swiss franc, thereby putting pressure on inflation. Due to the weakness of the Swiss franc, global demand for Swiss exports has strengthened.

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