The Swiss Franc (CHF) extended its slide against the US Dollar (USD) on Tuesday, with USD/CHF advancing for a fifth straight session amid broad-based Greenback strength. At the time of writing, the pair traded around 0.8085 after briefly testing the 0.8100 psychological mark its highest level since August 22.
The US Dollar’s advance comes as investors respond to the Federal Reserve’s (Fed) cautious yet hawkish tone following last week’s 25-basis-point rate cut. Fed Chair Jerome Powell reiterated that additional easing this year is “not a foregone conclusion,” prompting markets to trim expectations for a December cut.
Fed officials offer mixed policy signals
Divergent remarks from Fed policymakers have contributed to ongoing uncertainty around the policy path. Governor Lisa Cook described the current policy stance as “modestly restrictive,” suitable while inflation remains above target.
San Francisco Fed President Mary Daly emphasized that the central bank should “keep an open mind” about a December move, while Chicago Fed President Austan Goolsbee labeled inflation data as “worrisome.” Fed Governor Stephen Miran noted that monetary conditions have “passively tightened despite Fed cuts,” suggesting less urgency for further easing.
A broader decline in global risk appetite also boosted demand for the USD, as equity markets fell amid fading enthusiasm for AI-linked stocks and renewed caution over high valuations. The US Dollar Index (DXY) climbed above 100.00 — its strongest level since early August — up nearly 0.20% on the day.
Softer inflation pressures weigh on the Swiss Franc
On the Swiss front, the Franc weakened further after softer-than-expected inflation data on Monday reignited speculation that the Swiss National Bank (SNB) could revisit negative interest rates to combat disinflationary pressures.
SNB policymakers, however, maintained a cautious tone. Governing Board member Petra Tschudin said current interest rates are “where they should be,” adding that negative rates would only be reintroduced if necessary and that foreign exchange interventions remain an available tool.
SNB President Martin Schlegel added that inflation is expected to rise slightly in the coming quarters, though US tariff measures continue to dampen global growth.
With the USD supported by a hawkish Fed stance and the SNB signaling limited urgency to tighten policy, the short-term bias for USD/CHF remains tilted to the upside.
