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Source: Newsmaker.id
The USD/CHF pair extended its gains for the third consecutive day, trading around 0.8210 on Monday (November 9). The dollar’s rise is supported by expectations of a tightening in Federal Reserve policy, though further gains may be limited as falling oil prices could potentially ease inflationary pressure in the U.S.
Oil prices weakened after U.S. President Donald Trump indicated that further military action against Iran is highly unlikely, provided that negotiations regarding Iran’s nuclear program continue to show progress and the Strait of Hormuz remains open. A decline in energy prices could help curb inflation, ultimately reducing the pressure on the Fed to raise interest rates aggressively.
Nevertheless, the dollar continues to draw strong support from U.S. labor market data. Non-farm payrolls (NFP) for October rose by 165,000—well above the 65,000 expected—while the unemployment rate fell to 4.1%. These figures reinforce the view that the U.S. economy remains robust, with the market now pricing in a greater than 78% probability of a Federal Reserve interest rate hike in December.
Investor attention has now shifted toward U.S. CPI data, due Tuesday, and PPI data, due Friday. Both indicators will serve as key gauges of whether inflationary pressure remains strong enough to sustain expectations for interest rate hikes. High inflation figures could bolster the dollar, while lower-than-expected results might ease the pressure on monetary policy.
Newsmaker Analysis: While USD/CHF remains supported by strong U.S. labor data and expectations of interest rate hikes, the pair’s upward momentum faces several limiting factors. Declining oil prices could temper inflation, while the Swiss franc may attract safe-haven demand amid global uncertainty. In the short term, the direction of USD/CHF will largely depend on the CPI results and any shifts in market expectations regarding Federal Reserve policy. (srh)
Source: Newsmaker.id