The USD/CHF pair trades slightly higher around 0.8010 during early European hours on Thursday, supported by a weaker Swiss Franc (CHF) after Switzerland’s inflation data came in softer than expected. Market participants now shift focus to the upcoming US Initial Jobless Claims report due later in the day.
Swiss inflation drops to 0% YoY
Fresh data from the Swiss Federal Statistical Office showed that Switzerland’s Consumer Price Index (CPI) eased to 0% YoY in November, down from 0.1% previously and below expectations of 0.1%. The subdued reading reinforces the outlook that the Swiss National Bank (SNB) will maintain its accommodative stance, which tends to weigh on the CHF and support USD/CHF upside.
Fed leadership uncertainty adds nuance to USD outlook
On the US side, President Donald Trump signaled that his nominee to replace Jerome Powell as Fed Chair will be announced early next year.
According to Reuters, White House economic adviser Kevin Hassett has emerged as the leading contender, with expectations that he would advocate further rate cuts – an outlook that could limit USD strength. The CME FedWatch Tool shows nearly an 89% probability of a 25-basis-point rate cut at next week’s meeting.
ADP data highlights weakening labor conditions
Adding pressure to the US Dollar, Wednesday’s ADP report revealed that private employers shed 32,000 jobs in November, compared with a revised increase of 47,000 in October. The reading not only missed forecasts of a 5,000-job gain but also marked the steepest monthly decline since early 2023.
