The Swiss franc is strengthening against the dollar this Friday. Surprisingly, the USD/CHF has dropped below 0.8000, reaching lows not seen since July. It is now trading near 0.7972, a plunge of 1% on the day.



The reason? It seems that the U.S. employment report disappointed the markets. Only 22,000 new jobs in August, well below expectations. Unemployment rose to 4.3%, the highest level in nearly two years.

Operators are reconsidering their bets. Before, no one talked about a 50 basis point cut from the Fed. Now some see it as possible. The dollar is weakening on all fronts.

Bond yields are also plummeting. The 10-year bond is at 4.08%, the 2-year bond at 3.49%. They haven't been this low since April.

What's next? Eyes are on the inflation data coming Thursday. If it comes in low, it could lend more weight to the idea of a significant rate cut. The dollar would likely remain under pressure.

But not everything is said. Inflation remains a risk. The outlook is not entirely clear.
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