USD/CHF holds losses below 0.8000 as Swiss Franc rises on safe-haven flows
- USD/CHF falls as the Swiss Franc strengthens on rising geopolitical tensions.
- Trump warned Tehran against force on protesters, while Iran cautioned against any US or Israeli intervention.
- The US Dollar declines as traders adopt caution after federal prosecutors open a criminal investigation into Fed Chair Powell.
USD/CHF breaks its four-day winning streak, trading around 0.7990 during the Asian hours on Monday. The pair loses as the Swiss Franc (CHF) receives support from safe-haven demand amid increased geopolitical tensions. US President Donald Trump warned Tehran against using force on demonstrators and signaled possible action if the crackdown intensifies, while Iranian officials cautioned against any US or Israeli intervention.
Meanwhile, European countries led by the UK and Germany are considering increasing their military presence in Greenland to bolster Arctic security. Germany may propose a joint NATO mission, while UK Prime Minister Keir Starmer has urged allies to step up efforts in the High North, amid renewed comments by US President Donald Trump advocating US ownership of Greenland.
The CHF could further advance as investors assessed the Swiss National Bank (SNB) policy outlook. Swiss inflation rose to 0.1% year-over-year (YoY) in December 2025, marking the first increase since July but remaining near the lower end of the central bank’s 0–2% target range. This has reinforced expectations that the SNB will likely keep rates at 0% in the coming meetings, with inflation seen gradually rising alongside the economic recovery.
The USD/CHF pair depreciates as the US Dollar (USD) weakens, potentially amid concerns surrounding the Federal Reserve. Federal prosecutors have opened a criminal investigation into Fed Chair Jerome Powell regarding the central bank's renovation of its Washington headquarters and whether Powell lied to Congress about the project's scope, the New York Times reported on Sunday.
The Greenback declines on reinforced likelihood of further US Federal Rate cuts after the recent jobs report showed job growth fell short of expectations in December. US Nonfarm Payrolls (NFP) rose by 50,000 in December, falling short of November's 56,000 (revised from 64,000) and came in weaker than the market expectation of 60,000. However, the Unemployment Rate ticked lower to 4.4% in December from 4.6% in November.
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.
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