Dollar Begins to Waver, CHF Ready for Safe Mode
The Swiss Franc (CHF) strengthened slightly on Friday, capitalizing on a pause in the US dollar's correction after this week's rally took the greenback to its highest level in over a month. The USD/CHF pair hovered around 0.8013–0.8015 in the latest session, with the dollar seen weakening slightly from its peak.
However, the dollar's fundamentals remain quite solid. US data released this week confirmed the labor market remains stubborn: initial jobless claims fell to 198,000 (vs. an estimate of 215,000) and continuing claims reached around 1.884 million—strengthening the "Fed will hold rates longer" narrative.
In terms of indexes, the DXY held steady in the 99.2–99.3 range on Friday, after briefly climbing the previous day—signaling the dollar remains on track for its third consecutive weekly gain, although its pace slowed over the weekend.
The market is now almost fully pricing in the Fed's scenario of keeping interest rates on hold at its January 27-28 meeting, while awaiting further signals from central bank officials' comments (including today's scheduled speeches). The continued cautious tone regarding inflation means there's still room for a cut, but the timing is likely to be delayed.
On the Swiss side, support for the CHF also comes from expectations that the SNB will maintain its policy rate at 0% as inflation remains low and relatively manageable—making the franc more defensive as the dollar begins to lose its short-term steam.
Source: Newsmaker.id
