USD/CHF

Introduction: Geopolitics Takes Precedence Over Domestic Politics

Monday became a day on the foreign exchange markets when geopolitics outweighed everything else. The pound sterling weakened despite the remarkably orderly transition of power taking place in the United Kingdom. The reason was a sharp rise in energy prices caused by renewed US strikes on Iran and concerns about shipping through the Strait of Hormuz.

Investors turned to the dollar as a safe-haven asset, and this pressure proved stronger than the domestic factors affecting the British economy. GBP/USD declined by 0.11% to 1.3392, retreating from last week’s highs. The euro, by contrast, posted a modest gain, although analysts warn that the single currency’s vulnerability may become more apparent in the coming days.

What is driving this movement? Why is the energy shock having such a strong impact on the pound? And what should investors expect this week, with inflation data, congressional hearings, and the continuing Middle East crisis on the agenda?

The Dollar as a Beneficiary of the Energy Shock

US Energy Independence

Chris Turner of ING clearly identified the main reason behind the dollar’s strengthening: US energy independence. Unlike Europe and the United Kingdom, which depend on energy imports, the United States is capable of meeting its needs using its own resources.

If Iran effectively blocks the Strait of Hormuz, it will create serious problems for oil-importing countries. For the United States, however, it could become an advantage. Rising energy prices would encourage American producers to increase output, while exports of more expensive oil would generate additional revenue.

As a result, the dollar receives support not only as a safe-haven asset but also as the currency of an energy-exporting country that benefits from higher oil prices.

Demand for High-Yielding Currencies

Turner also notes that low volatility in the foreign exchange market...

Friday, 5 June 2026  ·  New York Open  ·  Capital Street FX Research Desk

NFP +172K May  ·  Unemployment 4.3%  ·  US 10Y 4.52%  ·  Fed Hike Probability 85%

Fed Funds 5.25%  ·  CPI Apr 3.4%  ·  Next FOMC Jun 17–18  

Session Prices — New York Session, 5 June 2026

S&P 500 at 7,550.5 (+0.59%). Nasdaq Composite at 39,432 (+0.61%). Dow Jones at 51,448 (+0.99%). USD/CAD at 1.3913 (+0.27%). USD/CHF at 0.7945 (+0.66%). US 10-year Treasury yield at 4.52% (+0.04%). WTI Crude at $91.47 (-3.32%). Gold XAU/USD at $4,348.10 (-2.58%). Wheat CBOT July at 608.75¢/bu (-0.29%). Bitcoin at $60,912.5 (-1.83%). Cardano ADA at $0.1604 (-2.10%). Intel at $107.31 (-4.20%). VIX at 16.52.

The NFP Story — Three Crossfires at Once

Friday's New York session opened into a market already shaken by three simultaneous stress tests: a stronger-than-expected NFP print, a sector-crushing selloff in semiconductor stocks triggered by Broadcom's AI chip outlook, and a crypto market that has shed more than 14% across seven consecutive sessions. The Federal Reserve's rate path is the thread binding them all — and today's jobs data just made the June 17-18 FOMC meeting materially more hawkish in character.

May's non-farm payroll report delivered 172,000 new jobs, firmly beating the consensus estimate of 130,000 and following an upward revision of April to 214,000. The unemployment rate held at 4.3%. Gains were led by leisure and hospitality, local government, and healthcare. Markets now price an 85% probability of at least one 25 basis-point rate hike before year-end, up from 60% a week ago. The 10-year Treasury yield climbed to 4.52% immediately post-release. The NFP result effectively forecloses any near-term Fed cut — the first rate reduction is now pushed to early 2027 in the base case.

The technology sector is experiencing its most severe single-session decline...

Tuesday, 6:00 PM Moscow time. For most people, it’s just another hour when the workday winds down and thoughts shift toward home. But for FX traders, this moment marks a point of maximum tension. At the New York cut, option contracts worth billions of dollars across major currency pairs will expire. And these expiries are not just accounting entries. They are a force capable of pulling spot exchange rates toward specific levels in the final hours before expiration — like a magnet drawing in iron filings. Let’s go through the major pairs and see where the traps are set.

EUR/USD: A Narrow Corridor Around 1.16

Two significant option clusters are expiring in euro-dollar. The first is €140 million at the 1.1640 strike. The second is €122 million at 1.1625. At the time the data was recorded, the spot rate stood at 1.1628 — right between the two expiry levels.

This is no coincidence. It’s a classic situation where option barriers create an invisible corridor in which price can remain trapped until the cut.

The mechanics are straightforward. Large option holders — banks and market makers — hedge their exposure. If they sold options at 1.1640, then as price approaches that level they are likely to sell euros to protect themselves from potential losses. Those flows create artificial resistance. The same mechanism works in reverse at 1.1625: as price falls toward that strike, market makers buy euros, creating artificial support.

As a result, the exchange rate becomes squeezed in a vice, and breaking these levels ahead of expiry becomes extremely difficult unless some overwhelming news shock hits the market.

USD/JPY: A Quarter Billion at 159.5

Dollar-yen looks even more intriguing. Options worth $231 million expire at the 159.50 strike. Another $240 million sits at 159.25. The spot rate is currently 159.26...