CHF/USD Update: Dollar Holds Firm as U.S. Data Clashes with Government Shutdown Uncertainty

The U.S. dollar remained steady against the Swiss franc on Wednesday, trading near 0.8100 after retreating slightly from a three-month high. Despite strong economic data out of the United States, optimism in the market remains subdued as the ongoing government shutdown continues to cloud sentiment and weigh on the currency’s outlook.

Fresh labor and services data from the United States offered a rare dose of positivity, signaling some resilience in the world’s largest economy. Private-sector employment saw a stronger-than-expected increase in October, while the services sector accelerated its pace of expansion, according to new purchasing managers’ data. These readings point to a steady, if uneven, recovery across key parts of the economy — yet investors remain cautious about how long the momentum can last.

The Federal Reserve’s next move also remains a point of debate. While traders had previously bet heavily on a December rate cut, those expectations have eased after the Fed’s latest comments hinted at a more measured approach. Policymakers appear unwilling to commit to fresh stimulus before clearer signs emerge from the official data — data that, ironically, has been disrupted by the government’s budget impasse.

Now entering its sixth week, the U.S. government shutdown is close to setting a new record as the longest in American history. Lawmakers have failed repeatedly to agree on a temporary funding bill, delaying key economic reports and fueling uncertainty about the broader economic fallout. The longer the deadlock drags on, the greater the risk it poses to both growth and market confidence.

In this climate of uncertainty, investors have turned once again toward safe-haven assets. The Swiss franc has benefited from this shift in sentiment, as global risk aversion rises amid fears of overvalued equity markets and warnings from major financial institutions about potential corrections.

The focus now turns to Switzerland’s upcoming unemployment report, due Thursday, which could provide further clues about the strength of the Swiss labor market and shape near-term movements in the franc. For now, however, the pair remains in a narrow range — a reflection of the uneasy balance between America’s surprisingly resilient data and the political paralysis dampening its currency’s shine.