USD/CHF edges lower toward 0.7910 as the US Dollar retreats

USD/CHF Dips Amid Dollar Weakness in Asian Markets

The USD/CHF currency pair slipped toward 0.7910 during Tuesday's Asian session, experiencing modest downward pressure as the US Dollar (USD) continued its recent decline following Monday’s retracement.

Currently, the US Dollar Index (DXY)—which measures the USD against a basket of six major currencies—has eased by 0.12% to approximately 98.20. On Monday, the DXY reached its highest level in over three weeks at 98.86, driven by heightened safe-haven demand after US authorities detained Venezuelan President Nicolas Maduro on drug-related charges.

Despite this, the US Dollar is facing headwinds due to a lack of positive domestic economic indicators. Monday’s release of the US ISM Manufacturing PMI revealed another contraction in factory activity, with the index dropping to 47.9 in December from 48.2 in November.

Looking ahead, traders anticipate increased volatility for the US Dollar as the Nonfarm Payrolls (NFP) report is set for release on Friday. This key employment data is expected to play a pivotal role in shaping market expectations for the Federal Reserve’s monetary policy direction, especially as Fed officials continue to highlight potential risks in the labor market.

Prior to the NFP release, attention will turn to several other US economic indicators, including the ADP Employment Change, ISM Services PMI for December, and November’s JOLTS Job Openings, all scheduled for publication on Wednesday.

On the Swiss side, the Franc (CHF) remains relatively stable as investors await December’s Consumer Price Index (CPI) figures, due Thursday. The outcome of this inflation report will be closely watched for its potential impact on the Swiss National Bank’s (SNB) future policy decisions.