USD/CHF climbs to over three- week high, around 0.9800 mark ahead of NFP

• Sustained USD buying interest pushed USD/CHF to a fresh multi-week high on Friday.
• The cautious market mood underpinned the safe-haven CHF and acted as a headwind.
• Traders also seemed reluctant to place aggressive bets ahead of the key US jobs report.

The USD/CHF pair prolonged its recent strong bounce from sub-0.9500 levels and gained some follow-through traction for the seventh successive day on Friday. The momentum pushed spot prices to over a three-week high during the first half of the European session, though stalled just ahead of the 0.9800 round-figure mark.

Following the previous day's brief pause, the US dollar was back in demand and shot to a fresh two-decade high amid expectations for more aggressive Fed rate hikes. The market bets were reaffirmed by hawkish minutes of the June 14-15 FOMC meeting released on Wednesday, indicating that another 50 or 75 bps rate hike is likely at the July meeting. This, in turn, was seen as a key factor that continued pushing the USD/CHF pair higher and contributed to the ongoing positive move.

That said, the prevalent cautious mood around the equity markets offered some support to the safe-haven Swiss franc and kept a lid on any further gains for the USD/CHF pair, at least for now. Traders also seemed reluctant to place aggressive bets and might prefer to wait for Friday's release of the closely-watched US monthly jobs data. The popularly known NFP report will play a key role in influencing the near-term USD price dynamics and provide a fresh directional impetus to the major.

The US economy is expected to have added 268K jobs in June, down from 390K in the previous month. Meanwhile, the unemployment rate is expected to hold steady at 3.6% during the reported month. Any significant divergence from the expected reading would infuse some volatility in the financial markets. This, in turn, will drive demand for the USD and produce short-term trading opportunities around the USD/CHF pair on the last day of the week.

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