The USD/CHF pair edged higher during early Asian trading on Friday, climbing to around 0.8145, up 0.22% on the day. The surge comes after US President Donald Trump imposed a steep 39% tariff on Swiss imports, triggering a sharp decline in the Swiss Franc (CHF) and lifting the US Dollar.
The tariff announcement has placed the CHF among the weakest-performing G10 currencies, with market participants reacting to the unexpectedly high rate. While the White House confirmed it would maintain minimum global tariffs at 10%, Switzerland was hit with a far more aggressive rate, increasing trade tensions and weighing on the Franc.
Fed Holds Steady, Focus Shifts to US Jobs Data
Earlier this week, the Federal Reserve kept interest rates unchanged, holding the federal funds rate steady at 4.25%–4.5%, in line with expectations. During the post-meeting press conference, Fed Chair Jerome Powell refrained from offering specific guidance for the upcoming September meeting, noting that policymakers would need more time to assess how recent tariffs may affect inflation and consumer prices.
Eyes on Key US Labor Market Data
All attention now turns to the July US Nonfarm Payrolls (NFP) report, due later today. Analysts forecast a gain of 110,000 jobs, down from June’s 147,000, while the Unemployment Rate is expected to tick higher to 4.2% from 4.1%.
Wage growth will also be in focus, with Average Hourly Earnings projected to rise 3.8% year-over-year, slightly above the previous 3.7% reading. If the labor data disappoints, it could trigger a pullback in the US Dollar and limit further upside for USD/CHF.
USD/CHF Outlook
As geopolitical tensions and tariff shocks rattle currency markets, the USD/CHF pair may remain volatile ahead of the US jobs data. A stronger-than-expected report could push the pair toward new highs, while any signs of labor market weakness may offer a temporary reprieve for the Swiss Franc.
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