Swiss Franc weakens against US Dollar after strong ADP and ISM Services PMI data

USD/CHF extends its advance on Wednesday as ongoing tensions in the Middle East and stronger-than-expected US labor data lift the US Dollar (USD). At the time of writing, the pair is trading around 0.7900, staying on the front foot for a third straight day.

The latest ADP report showed US private payrolls rose by 122K in May from 105K in April, topping market expectations of 117K. It was also the highest level since March 2025.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 99.47, near the upper end of its recent range and up 0.25% on the day.

Recent labor data suggests the US job market is regaining momentum after last year’s cooling trend. JOLTS Job Openings data released on Tuesday also surprised to the upside, showing the highest level of job openings since May 2024.

Meanwhile, the final reading of the US S&P Global Services Purchasing Managers Index (PMI) eased to 50.7 in May from 50.9 in April, missing market expectations of 51. However, the ISM Services PMI rose to 54.5 in May from 53.6 in April, beating forecasts of 53.8.

Attention now turns to the US Nonfarm Payrolls (NFP) report due on Friday. Analysts expect the US economy to add 85K jobs in May after a 115K increase in April.

A stronger-than-expected reading could further support hawkish Federal Reserve (Fed) expectations as markets remain concerned about inflation risks linked to higher Oil prices.

On the Swiss side, traders await Switzerland’s Consumer Price Index (CPI) data due on Thursday. Annual inflation is expected to rise to 0.8% in May from 0.6% in April.

SNB Chairman Martin Schlegel said on Thursday that medium-term inflation pressures remain broadly unchanged and reiterated that the central bank stands ready to intervene in FX markets to counter excessive Swiss Franc (CHF) strength. He also warned that the Iran war could increase pressure on the Franc.

On the geopolitical front, traders are closely watching whether Washington and Tehran can reach a deal to end the war after tensions escalated again this week. US President Donald Trump denied reports that talks had stalled and said Iran had agreed not to have a nuclear weapon, Reuters reported on Wednesday.