The US Dollar (USD) extended its advance against the Swiss Franc (CHF) on Wednesday, driven by stronger-than-expected US labor data and heightened geopolitical tensions in the Middle East [1][2]. The USD/CHF pair was trading around 0.7900, marking its third consecutive day of gains [1]. The US Dollar Index (DXY) was reported at 99.47, up 0.25% on the day and near the upper end of its recent range [1], while another source noted DXY trading near a fresh weekly high of 99.50 and approaching May's high at 99.54, with a break above hinting at a potential test of 100 [2].
US economic data released this week showed private payrolls rising by 122K in May, surpassing expectations of 117K and marking the highest level since March 2025 [1]. The JOLTS Job Openings also surprised to the upside, showing the highest level since May 2024 [1]. However, the final reading of the US S&P Global Services PMI eased to 50.7 in May from 50.9 in April, missing market expectations of 51 [1][2]. The Composite PMI was confirmed at 51.5, slightly below the anticipated 51.7 [2]. In contrast, the ISM Services PMI rose to 54.5 in May from 53.6 in April, beating forecasts of 53.8 [1].
Market reactions were notable, with the US Dollar maintaining its risk-off strength amid renewed Middle East tensions, including reports of Iran resuming attacks on regional neighbors and US defensive strikes [2]. The USD was the strongest against the New Zealand Dollar, up 0.88%, and gained 0.39% against the Swiss Franc [2]. US indexes traded in the red, extending losses following the dismal PMI readings, while crude oil prices remained elevated, with West Texas Intermediate (WTI) trading at $93 [2].
Looking ahead, attention is focused on the upcoming US Nonfarm Payrolls (NFP) report due Friday, with analysts expecting an 85K job increase in May after a 115K rise in April [1]. A stronger-than-expected NFP could reinforce hawkish Federal Reserve expectations amid ongoing inflation concerns linked to higher oil prices [1]. On the Swiss side, traders await Switzerland’s Consumer Price Index (CPI) data due Thursday, with annual inflation expected to rise to 0.8% in May from 0.6% in April [1]. SNB Chairman Martin Schlegel reiterated the central bank's readiness to intervene in FX markets to counter excessive CHF strength and warned that the Iran war could increase pressure on the Franc [1].
CONCLUSION
The US Dollar has strengthened notably against the Swiss Franc and other major currencies, supported by robust US labor data and risk aversion stemming from geopolitical tensions. Market participants are now awaiting key US and Swiss economic releases, which could further influence currency movements and central bank policy expectations. The overall sentiment remains positive for the USD, with high market impact observed.