USD/CHF steadies as traders await NFP revisions

• USD/CHF stabilizes around 0.7940, recovering from its lowest level since July 24.
• Traders await US NFP benchmark revision due at 14:00 GMT, which is expected to show sharp downward revisions to job growth.
• Markets have fully priced in a 25 basis point rate cut at the Federal Reserve’s September 16-17 meeting, with a 50 bps move still seen as a possibility if the data proves weaker than feared.

The Swiss Franc (CHF) softens slightly against the US Dollar (USD) on Tuesday, with the USD/CHF pair stabilizing after a two-day decline, as the Greenback attempts to recover from seven-week lows. Traders are treading cautiously ahead of the US Bureau of Labor Statistics’ (BLS) preliminary benchmark revisions to Nonfarm Payrolls (NFP), due at 14:00 GMT. The revisions are widely expected to show that job growth over the past year was overstated — confirming that the US labor market has been cooling more sharply than initially reported.

At the time of writing, USD/CHF is trading around 0.7945 during the American session, after briefly dipping to its lowest level since July 24. The modest rebound reflects a tentative recovery in the Greenback, supported by pre-event positioning and a slight bounce in US Treasury yields.

The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, fell to a seven-week low — its weakest level since July 24 — before stabilizing near 97.50 at the time of writing. However, the index remains under pressure from a dovish Federal Reserve (Fed) outlook, with markets expecting the central bank to prioritize maximum employment over price stability within its dual mandate, following last week's softer-than-expected Nonfarm Payrolls (NFP) report.

According to most estimates, the upcoming NFP revisions could subtract between 475,000 and 1 million jobs from previously published payroll figures for the 12 months through March 2025. The expected downgrade stems from more comprehensive tax-based data, suggesting that earlier readings had overstated labor market strength due to statistical modeling limitations. With recent indicators already pointing to a slowdown, today's revision is seen as the final confirmation — adding weight to expectations that the Fed will cut rates at its September 16-17 meeting. While a 25 basis point move is now widely anticipated, some market participants are also positioning for a more aggressive 50 bps cut, should the data signal a deeper-than-feared labor market correction.

Looking ahead, traders will keep a close eye on the US Producer Price Index (PPI) due Wednesday and the Consumer Price Index (CPI) on Thursday for fresh clues on inflation dynamics. Stronger-than-expected data could temper market expectations for aggressive Fed easing, while a softer print would likely reinforce the case for a larger rate cut. On the Swiss side, attention turns to SNB Chairman Martin Schlegel’s speech on Wednesday. In a recent interview, Schlegel noted that the hurdle to reintroducing negative interest rates remains “high,” though the Swiss National Bank stands ready to act if necessary.