USD/CHF: maintaining the potential for further growth

DXY Chart

The dollar continues to advance, and the DXY dollar index resumed growth, bouncing off the local low of 101.30, reached last week. As of this writing, DXY futures are traded near 102.72, 142 pips above this local low. The continuing high yield of US bonds also supports the dollar. US government bonds continue to fall in price. Thus, the yield on 10-year bonds reached 3.058% today, the highest level since May 12. The high yield of US bonds makes the dollar an attractive asset for investment, given the prospects for further tightening of the Fed's monetary policy.

10Y Chart

In addition, investors prefer the dollar to other traditional defensive assets - gold, franc, yen.

According to a report released last Friday by the US Department of Labor, employment outside the agricultural sector (NFP) rose by 390 thousand in May, while the unemployment rate remained unchanged at 3.6% for the second month in a row. The growth of the average hourly wage of Americans also kept the pace at the level of 0.3% m/m. This report is unlikely to affect the decision of the Fed leaders, but only strengthen it on the issue of further tightening of the monetary policy of the US central bank.

As for the USD/CHF pair, it is growing today for the 3rd day in a row after the release of a strong report by the US Department of Labor on Friday.


Rebounding from local support at 0.9555, USD/CHF reached a 3-week high at 0.9772 today, and at the time of writing this article, it is traded near 0.9766, maintaining the potential for further growth.

Tomorrow, the volatility in the quotes of the franc and the USD/CHF pair will rise again at the very beginning of the European session: at 05:45 (GMT) the Swiss State Secretariat for Economic Affairs (SECO) will publish a report on the state of the labor market in Switzerland. Unemployment is expected to remain at a 4-month low of 2.2% in May. The value of the indicator has been steadily declining since December 2021, and this is a bullish factor for the franc, which, among other things, is popular with investors as a protective asset.

Nevertheless, at the moment, the main tone in the USD/CHF pair is still set by the US dollar, and it continues to grow in price.