USD/CHF hits fresh four-week lows at 0.7900 on risk-averse markets

• The US Dollar hits fresh four-week lows against the Swissie, at 0.7900.
• The Swiss Franc appreciates across the board on Friday, favoured by risk-averse markets.
• Dwindling hopes of a Fed cut in December are failing to support the US Dollar.

The US Dollar remains vulnerable against a firmer Swiss Franc, which is drawing support from a cautious market mood to appreciate against its main peers on Friday. The pair is trading at 0.7920 at the time of writing, after having reached fresh four-week lows at 0.7900, and is on track for a nearly 1.5% weekly sell-off.

The safe-haven Swiss Franc is outperforming on Friday, favoured by risk-off markets, with European equity markets in the red, following significant declines on Wall Street and in Asia. In the economic calendar, the weak Chinese housing prices and a deeper-than-expected slowdown in Industrial Production have failed to lift sentiment.

The Dollar remains vulnerable awaiting US official data

Regarding the US Dollar, investors remain wary of placing large directional bets, awaiting the release of a backlog of data next week, as US official agencies resume their activity. Private reports released during the shutdown have added to evidence of a deteriorating labour market, and the investors expect macroeconomic data to confirm that view, adding pressure on the Fed to cut rates further in December.

Most Federal Reserve speakers, however, have conveyed a hawkish message this week. On Thursday, Fed's Mussalen and Hammack reiterated their concerns about inflation, and called for steady rates in December, and the Minneapolis Fed President Neel Kashkari affirmed that he does not have a strong inclination for an interest rate cut.

Traders have pushed back hopes of a monetary easing in December.  Chances of a 25 basis points rate cut next month have dropped to 50% from 64% last week and above 90% before October's Fed meeting, according to the CME Fed Watch Tool. This, however, is failing to provide any significant support to the US Dollar.