Dollar Set For Weekly Loss As Data Fog Looms; Swiss Franc Holds Near Highs

Traders have been selling the greenback into uncertainty. After a record 43 day shutdown, key releases like the October jobs report and parts of the inflation data may be delayed or missing, leaving the Federal Reserve with a more blurred picture of the economy. As one strategist put it, when markets are driving in a data fog, they tend to slow down rather than accelerate rate cuts.

That caution is visible in pricing. Fed officials have struck a more hawkish tone in recent days, emphasising sticky inflation and a still resilient labour market, and futures now assign just over a 50 percent chance of a 25 basis point move in December, down sharply from well over 90 percent a month ago. Odds for a follow up cut in January are almost fully priced, while expectations for 2026 have barely shifted.

The softer dollar tone has allowed the euro to build on recent gains. EUR/USD traded around 1.1640 after touching a two week high above 1.16 earlier in the week, leaving the single currency on course for a modest rise over the last five sessions as investors rotate away from U.S. assets.

For Swiss franc traders, the picture is even clearer. The franc is trading close to a more than three week high against the dollar, with USD/CHF hovering in the 0.79 area after briefly dipping near 0.7950 on Thursday as the dollar index retreated from above 100 toward 99.

Against the euro, the franc remains strong as well. EUR/CHF is trading around 0.92, near the lowest levels of the year for the euro, meaning one euro buys significantly fewer francs than it did in the spring. Recent data show the cross has slipped from above 0.93 at the start of November to around 0.922 today, underlining persistent franc demand.

Behind that strength is a very stable Swiss policy backdrop. The Swiss National Bank has kept its policy rate at 0 percent, sees inflation in the lower half of its 0 to 2 percent target band and, according to recent minutes and public remarks, is not considering a return to negative rates unless the economy is hit by a major shock. With inflation low and tariffs risks monitored but contained, the SNB can afford to stay patient while the franc continues to benefit from safe haven flows.

For EUR/CHF and USD/CHF, that means near term moves are likely to be driven less by any change in Bern and more by how bad, or how reassuring, the incoming U.S. data look once the shutdown related fog starts to clear.