USD/CHF Hovers Below 0.8000 as Dollar Weakness Persists Ahead of Sentiment Data

The USD/CHF pair is trading quietly around 0.7960 during late Asian hours Friday, showing minimal movement as the greenback attempts to stabilize following Thursday's sharp decline.

I've been watching the dollar get absolutely hammered after those shocking US jobless claims figures released yesterday. The data showed initial claims hitting 263K - significantly above both expectations and previous readings, marking a four-year high. This isn't just another economic miss; it's a glaring red flag about deteriorating labor market conditions.

The labor market weakness has practically cemented the Fed's rate cut next Wednesday. Looking at the CME FedWatch tool, there's now a 7.5% chance of a massive 50 basis point cut, though most traders still expect the standard 25bp reduction. Either way, the dollar's in trouble.

What's particularly interesting is how traders are positioning ahead of today's Michigan Consumer Sentiment data due at 14:00 GMT. The index is expected to slip marginally to 58.0 from 58.2 in August. I'm curious whether consumer confidence has been further eroded by all this tariff talk, or if the prospect of lower interest rates has provided any psychological buffer.

Meanwhile, the Swiss franc continues to find support from SNB Chairman Martin Schlegel's recent comments. He basically shut down any speculation about negative rates, warning they could create "undesirable side effects for savers and pension funds." This stance is helping maintain franc strength despite broader market volatility.

The technical picture shows USD/CHF struggling to gain any meaningful traction above the 0.7960 level. With the dollar's fundamental outlook remaining weak and the Swiss franc supported by a relatively hawkish central bank, I wouldn't be surprised to see further downside in this pair, especially if today's sentiment data disappoints.