USD/CHF holds near 0.8150 as Swiss Franc receives support from persistent safe-haven flows
- USD/CHF stays close to the 0.8099 level—its lowest point since September 2011.
- The Swiss Franc continues to benefit from safe-haven demand, its appeal could ease if global risk sentiment improves.
- Deutsche Bank has revised its outlook, now forecasting a 25 basis point rate cut in December.
USD/CHF moves sideways after registering losses in the previous three successive sessions, hovering around 0.8150 during the European trading hours on Tuesday. The pair remains within striking distance of the 0.8099 mark—its lowest level since September 2011—briefly touched on April 11.
The Swiss Franc (CHF) remains supported by safe-haven flows as investor uncertainty lingers amid unpredictable US trade and economic policies. Some market relief emerged after US President Donald Trump announced temporary exemptions on key tech products—including semiconductors and smartphones—from the latest round of tariffs on Chinese imports.
However, the CHF’s safe-haven appeal may be tempered by an improvement in global risk sentiment. On Monday, Trump signaled potential temporary relief from the proposed 25% auto tariffs, aiming to give automakers time to adjust supply chains.
Meanwhile, downside pressure on the USD/CHF pair may be limited as the US Dollar attempts to stabilize amid growing concerns over stagflation. In early Tuesday trading, Atlanta Fed President Raphael Bostic stated that the Federal Reserve still has “a long way to go” to bring inflation down to its 2% target, cooling expectations for imminent rate cuts.
In a notable policy shift, Deutsche Bank now projects a 25 basis point rate cut in December—its first anticipated cut for 2025—followed by two additional cuts in Q1 2026. The bank sees the terminal rate settling between 3.5% and 3.75%.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
추천 기사
