The USD/CHF pair is holding steady around 0.7960 as we await the US Nonfarm Payrolls (NFP) report for October and November. Predictions suggest that 40,000 new jobs will be added in November, a drop from 119,000 in September. The US Dollar Index is near an eight-week low at around 98.15. The Unemployment Rate is expected to stay the same at 4.4%. This employment data is key for the Federal Reserve’s monetary policy since officials are more focused on the job market rather than inflation. San Francisco Fed President Mary Daly supports cutting interest rates, citing high inflation and a weakening job market.

Swiss Economic Outlook

In Switzerland, inflation is expected to average 0.2% this year and into 2026, which will affect the Swiss National Bank’s policy decisions. GDP growth is projected to slow to 1.1% in 2026, down from 1.4% in 2025. Meanwhile, the USD/CHF remains steady as investors watch for upcoming US economic data, including Retail Sales and S&P Global PMI reports. The market is eagerly waiting for today’s jobs report, keeping USD/CHF stable near 0.7960. We’re anticipating a low number of 40,000 new jobs, a sharp decrease from the monthly average of over 180,000 in much of 2024. This number is crucial as the Federal Reserve has expressed concerns about a softening labor market. If the jobs number meets or falls below expectations, the US Dollar may weaken further as traders bet on Fed rate cuts in early 2026. Futures markets already show an over 85% chance of a rate cut by the end of the first quarter. This suggests that traders might look to buy put options on USD/CHF to prepare for a decline. On the flip side, if the jobs report exceeds expectations, we could see a significant rally in the US Dollar as the market adjusts its dovish bets. We witnessed a similar quick turnaround in the third quarter of 2024 when a strong inflation reading surprised traders. In such a case, call options on USD/CHF could yield substantial gains.

Volatility and Market Strategy

Due to high anticipation, volatility is heightened, making options pricier than they were weeks ago. If the jobs report hits the mark, the pair may not move much, resulting in a drop in this priced-in volatility. Selling straddles or strangles could be a good strategy to profit from this expected decrease after the announcement. However, the Swiss Franc’s potential is limited by consistently low inflation forecasts of just 0.2% for the next year. With Swiss economic growth also expected to drop to 1.1% in 2026, the Swiss National Bank is unlikely to tighten its policy. Thus, the Fed’s actions will be the main influence on the currency pair in the upcoming weeks. Create your live VT Markets account and start trading now.

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