USD/CHF choppy, but set to end session at 0.9170ish lows as risk appetite deteriorates

  • USD/CHF has been choppy on Friday, but slipped back to session lows around 0.9170 in recent trade.
  • The pair is being weighed as risk appetite ends the week on the back foot, favouring haven like CHF.

It’s been a choppy session but USD/CHF ultimately looks set to end the day lower by about 30 pips or just over 0.3%. The pair is currently trading at session lows in the 0.9170 area, having started the day to the north of the 0.9200 level, and is eyeing a test of this week’s lows at 0.9150. Unless USD/CHF can break below support before the NY close, which seems unlikely as volumes decline into the weekend, it seems the pair will be consigned to enter next week within the same 0.9150-0.9220ish range that has prevailed all week.

A deterioration in risk appetite over the last few hours that has seen US equities, commodities and most risk-sensitive commodities come under pressure is benefitting traditional safe-haven assets. Long-term US yields are substantially lower reflecting a bond bid that is also helping the likes of the yen and Swiss franc. Friday’s US November labour market report was mixed, with the headline NFP number missing expectations by a big margin but other aspects of the report, such as the unemployment rate, suggest the labour market continues to progress and remains tight. That, taken with more hawkish rhetoric from FOMC member James Bullard, has helped keep Fed tightening expectations for 2022 intact, so the moves being seen in bonds and FX are more to do with risk appetite.

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