USD/CHF holds steady amid US Dollar decline, Swiss Franc softening

• The US Dollar declines as expectations for a December Fed rate cut rise sharply.
• The Swiss Franc also softens as investors unwind defensive long-CHF positions.
• USD/CHF trades around 0.8080 on Tuesday, virtually unchanged on the day.

USD/CHF holds near 0.8080 on Tuesday at the time of writing, with the pair showing little direction with simultaneous weakness in both the US Dollar (USD) and the Swiss Franc (CHF). Pressure on both currencies is offsetting itself, keeping the pair confined to a narrow range.

The US Dollar is slipping as expectations for monetary easing strengthen noticeably. Markets now assign an 81% chance of a 25-basis-point rate cut by the Federal Reserve (Fed) in December, according to the CME FedWatch tool, up from 71% the previous day. 

This shift comes after a series of dovish-leaning remarks from policymakers. Federal Reserve Governor Christopher Waller stated that labour-market weakness has become his main concern and argued that inflation is “not a big problem” given the recent softening in employment data. He also suggested that the September payroll figure is likely to be revised lower, pointing to a labour market that is becoming increasingly delicate and concentrated.

Recent US data support this view. ADP figures show that private employers shed an average of 13,500 jobs per week over the four weeks ending November 8, reinforcing the picture of a gradually slowing US economy. Meanwhile, the Producer Price Index (PPI) delivered benign readings as headline PPI rose 2.7% YoY, with core at 2.6%, while Retail Sales for September increased just 0.2%, missing expectations of 0.4%. The Conference Board’s Consumer Confidence Index fell sharply to 88.7 in November, signalling deteriorating household sentiment. Against this backdrop, several Fed officials, including Stephen Miran earlier in the day, now argue that the economy “calls for large rate cuts.”

The Swiss Franc is also losing momentum. After a long stretch of appreciation, investors are trimming long-CHF positions. A modest improvement in broader risk sentiment, partly driven by early signs of progress in US-brokered efforts to refine a Russia-Ukraine peace framework, is reducing safe-haven demand.

The Swiss National Bank (SNB) remains relatively dovish, with its policy rate at 0% after two cuts this year and policymakers expressing readiness to act if monetary conditions tighten or if price pressures ease further. However, the SNB has also indicated that inflation is likely to rise slightly in the coming quarters, suggesting limited urgency for further easing.

USD/CHF Technical Analysis

In the 4-hour chart, USD/CHF trades at 0.8084, below the day opening by 4 pips and little changed on a daily basis. The 100-period Simple Moving Average (SMA) edges higher near 0.8034, with price holding above it and preserving a mild bullish bias. The SMA’s rising slope suggests ongoing bid interest as pullbacks find support above the average. The Relative Strength Index (RSI) stands at 57 (neutral), keeping momentum steady above its midline. The rising trend line from 0.7879 underpins the bias, offering support near 0.8070.

Immediate resistance aligns at 0.8102, followed by 0.8124. Support is seen at 0.8058, then at 0.8036. A break above the first barrier could extend gains toward the next, while loss of the initial support would expose the lower band. Overall, the setup favors dips being bought as long as price holds above its rising average.

(The technical analysis of this story was written with the help of an AI tool)