USD/CHF flat lines near 0.8300 ahead of US NFP release
- USD/CHF holds steady around 0.8290 in Friday’s Asian session.
- Easing trade tensions might weaken safe-haven demand.
- The US April NFP report will be in the spotlight later on Friday.
The USD/CHF pair trades on a flat note around 0.8290 during the Asian trading hours on Friday. Traders prefer to wait on the sidelines ahead of the release of the highly anticipated US Nonfarm Payrolls (NFP) report, which is due later on Friday.
US President Donald Trump announced potential trade deals with India, South Korea, and Japan, seeking to convert his tariff policy into trade agreements. US officials, including Treasury Secretary Scott Bessent and White House economic adviser Kevin Hassett, also expressed hope for progress in easing trade tensions.
Early Friday, China said it is considering the possibility of trade talks with the United States, the first sign since US President Donald Trump raised tariffs in April. Optimism about de-escalation in the global trade conflict might lift the US Dollar (USD) against the Swiss Franc (CHF).
However, uncertainty about the effect of tariffs on inflation and the economy raises the fear of an economic slowdown in the US, which might cap the upside for the Greenback. The US economy contracted at an annualised rate of 0.3% in the first quarter (Q1) of 2025, according to the US Commerce Department on Wednesday. This figure came in weaker than the estimation of 0.4%. Traders will closely watch the NFP report on Friday for fresh impetus, which is expected to show 130K job additions in April.
Meanwhile, the persistent geopolitical tensions could boost the safe-haven flows, benefiting the CHF. US Secretary of State Marco Rubio said on Friday that Ukraine and Russia positions are still a little far apart, adding that it's going to take a breakthrough soon in Ukraine to make this possible.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
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