The USD/CHF pair extended its upward momentum on Friday, reaching the 0.7955 area and marking its highest level in nearly two months. The move was largely driven by broad-based US Dollar strength after stronger-than-expected US employment data reinforced expectations that the Federal Reserve could maintain a restrictive monetary policy stance for longer.

According to the latest labor market report, the US economy added 172,000 jobs in May, significantly surpassing market forecasts. In addition, April’s payroll figures were revised upward, while the unemployment rate remained unchanged at 4.3%. The solid employment figures suggest that economic activity remains resilient and that the labor market continues to perform well despite elevated interest rates.

The stronger jobs report has reduced expectations of near-term rate cuts from the Federal Reserve. Instead, investors are increasingly considering the possibility that policymakers may keep rates unchanged for an extended period or even tighten policy further if inflation remains persistent.

Inflation concerns have been amplified by higher energy costs, largely linked to ongoing supply disruptions in the Strait of Hormuz. Rising Oil prices have complicated the Fed’s efforts to bring inflation back toward its 2% target, encouraging traders to reassess the future interest-rate outlook.

As a result, US Treasury yields and the US Dollar have both moved higher. The US Dollar Index (DXY) advanced toward the psychologically important 100.00 level, reflecting growing confidence in the Greenback.

Meanwhile, the Swiss Franc faced pressure after Switzerland’s latest inflation figures came in below expectations. Inflation remains comfortably within the Swiss National Bank’s target range, reducing the urgency for tighter monetary policy. Market participants currently expect only limited policy adjustments from the SNB over the coming year.

With US economic fundamentals remaining firm and Swiss inflation subdued, USD/CHF continues to find support, although future moves will depend on incoming inflation and central bank signals.

Trade Idea:
Bullish above 0.7930, targeting 0.8000 and 0.8050. A break below 0.7900 could invalidate the setup and expose the pair to renewed downside pressure.