USD/CHF advances toward 0.9100 ahead of US NFP data

• USD/CHF approaches 0.9100 as Swiss Franc losses appeal amid easing price pressures.
• The USD index consolidates around 106.00 as the focus shifts to the US NFP.
• Investors hope that the Fed is done with hiking interest rates.

The USD/CHF pair extends recovery to near 0.9070 ahead of the United States labor market data for October. The Swiss Franc asset aims to recapture the 0.9100 resistance while the US Dollar Index (DXY) has turned sideways around 106.00.

S&P500 futures generated some losses in the European session, portraying some decline in the risk appetite of the market participants. The USD index struggles to hold recovery as investors hope that the Federal Reserve (Fed) is done with its historically tight rate-hiking campaign. 10-year US Treasury yields have dropped to 4.67% on expectations that the Fed will keep interest rates unchanged in the range of 5.25-5.50% till the year-end.

Going forward, the US Nonfarm Payrolls (NFP) data will be keenly watched. Analysts at RBC Economics see a 208K gain in payroll employment. Still, labor demand has also been slowing under the surface in the US with job openings drifting lower and wage growth slowing. The Unemployment Rate may tick up to 3.9% (despite higher employment) after climbing to 3.8% over August and September from 3.5% in July.

Economists will keenly watch the Average Hourly Earnings data to understand how underlying inflation risks are developing. Monthly Average Hourly Earnings is seen expanding by 0.3% vs. 0.2% growth in September. The annual earnings data rose by 4.0% against 4.2%.

The Swiss Franc weakens against the US Dollar as the Swiss Consumer Price Index (CPI) continues to remain below the 2% target. Swiss annual inflation at 1.7%, remained in line with estimates and the former release. The monthly inflation grew marginally by 0.1% as expected.