On Friday, broad-based USD strength propelled USD/CHF to three-month highs.
The USD was underpinned by hawkish Fed expectations, which remained favorable.
The monthly jobs report from the United States should aid in determining the next leg of a trend.
During the early European session, the USD/CHF pair caught some fresh bids and rocketed to around three-month highs, around 0.9275 in the previous hour.
Following two days of two-way range-bound price activity, the USD/CHF pair regained some upward traction on Friday, aided by broad-based US dollar appreciation. Speculations that the Fed would tighten monetary policy sooner if price pressures continue to worsen acted as a tailwind for the dollar.
The market’s hopes were boosted even more by the US ISM Manufacturing survey released on Wednesday, which revealed that the prices paid sub-component surged to a new high of 92.1 in June. This, to a greater extent, helped counter a fresh step down in US Treasury bond yields, continued to bolster the greenback, and gave the USD/CHF pair a minor boost.
On the other hand, demand for traditional safe-haven currencies, such as the Swiss franc, was damaged by the current risk-on climate, as seen by a generally bullish sentiment around the equities markets. This was considered as just another element supporting the USD/CHF pair’s upward trend to its highest level since April 9.
It would be fascinating to watch if bulls can capitalize on the momentum or if they decide to take profits ahead of the US monthly jobs data. The Fed’s policy outlook could be influenced by the NFP report. This, in turn, will play a crucial part in driving the USD in the short term and determining the next leg of the USD/CHF pair’s directional move./n
