The Swiss Franc (CHF) strengthened against the US Dollar (USD) on Monday as the USD/CHF pair struggled to sustain levels above the 0.8100 mark. The pair subsequently slipped toward the 0.8090 region, surrendering its earlier gains and moving into negative territory on the daily chart. The decline came after Switzerland released August unemployment and foreign currency reserve figures.
Data from the Swiss State Secretariat for Economic Affairs showed that Switzerland’s unemployment rate remained steady at 3.1% in August, marking the fifth consecutive month at this level. Meanwhile, the Swiss National Bank (SNB) reported that foreign currency reserves rose modestly to CHF 770 billion in August, compared with CHF 768 billion in July.
Attention is now shifting toward the United States, where stronger-than-expected labor market data have increased expectations for tighter Federal Reserve policy. Friday’s employment report showed that the US economy added 162,000 jobs in August, significantly exceeding the 55,000 consensus forecast and Commerzbank’s 50,000 estimate. Previous employment figures were also revised higher by a combined 55,000, providing further evidence of resilience in the US labor market.
Despite the upbeat jobs figures, inflation remains crucial for the Federal Reserve’s September 16 policy decision. August consumer price data, due later this week, could play a decisive role in determining whether policymakers raise interest rates.
With US markets closed for the Labor Day holiday, currency volatility remained relatively subdued on Monday. However, the widening monetary-policy divergence between the Fed and SNB could continue limiting USD/CHF downside moves. CME FedWatch data indicate that markets are pricing a 58% probability of a 25-basis-point Fed rate hike in September, up from 50% before Friday’s employment report. In contrast, the SNB is broadly expected to maintain its benchmark rate at 0% through 2026 and into the first half of 2027.
Trade Idea: Consider selling USD/CHF near 0.8100, targeting 0.8050, with a stop-loss above 0.8130 if the pair breaks resistance decisively.