USD/CHF rose for a third straight session, trading near 0.8210 in Asian hours on Monday, as a hawkish Federal Reserve outlook supported the US Dollar. Upside appeared capped by falling crude oil prices, which can ease inflation pressure. Energy markets retreated after US President Donald Trump said further military action against Iran was “highly unlikely” if progress continues on Iran’s nuclear programme and the Strait of Hormuz stays open, while he also linked the earlier rise in energy costs to Republican midterm election losses. Markets also tracked shifting US political dynamics, with a Democratic sweep raising expectations of tighter regulation of the AI buildout, a backdrop that may lift safe-haven demand for the Swiss Franc and increase the prospect of US fiscal restraint.
Economic Indicators and Fed Outlook
Rate expectations firmed, with the CME FedWatch tool putting the probability of a 25-basis-point hike at the December FOMC meeting above 78%. October Nonfarm Payrolls increased by 165,000 versus a 65,000 consensus and September’s revised 60,000, while the Unemployment Rate fell to 4.1% against a 4.2% forecast. Attention turns to Tuesday’s CPI and Friday’s PPI for policy guidance. Separately, UOB sees a test of 0.8110, while a break above 0.8205 would suggest the prior downtrend has ended.
