USD/CHF Trades Near Six-Week Low as Market Awaits U.S. Jobs Report

U.S. Dollar Pressured by Weak Economic Indicators

The USD/CHF pair trades cautiously around the 0.8200 level during late Asian hours on Thursday, hovering near a six-week low. Market participants are bracing for potential volatility ahead of the U.S. Nonfarm Payrolls (NFP) release, which is expected to provide fresh clues on labor market strength.

The U.S. Dollar fell sharply on Wednesday after a string of disappointing data. Most notably, the ADP report showed just 37,000 new private sector jobs in May—the weakest reading since February 2021. Additional pressure came from a surprising contraction in ISM Services PMI and a spike in input costs, reinforcing concerns over stagflation, where slowing growth and rising prices coexist.

SNB Faces Rate Cut Pressure Amid Deflation Risk

In Switzerland, deflation concerns are mounting after the Consumer Price Index (CPI) declined by 0.1% year-on-year in May, following a flat reading in April. This development has heightened speculation of a potential rate cut by the Swiss National Bank (SNB) at its upcoming June 19 meeting.

SNB President Martin Schlegel acknowledged that negative inflation could persist in the near term but emphasized the central bank’s commitment to medium-term price stability. “Even negative inflation figures cannot be ruled out in the coming months,” he said, adding that such short-term data doesn’t automatically warrant policy changes.

Elsewhere, former President Donald Trump’s recent comments hinted at difficult trade negotiations with China, keeping global market sentiment in check.

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