The USD/CHF pair extended its upside momentum during Wednesday’s Asian session, revisiting its monthly high around 0.8010 as the US dollar remained broadly supported. The greenback’s strength persisted even as the US government shutdown entered its second week, reflecting sustained demand for the currency amid uncertainty in global markets.
US dollar supported by policy outlook and safe-haven flows
At the time of writing, the US Dollar Index (DXY)—which measures the greenback against a basket of six major currencies—was up 0.3% near 98.90, marking a two-month high. The dollar’s gains come after US President Donald Trump hinted that the White House may scale back spending programs amid the ongoing government closure and warned of potential layoffs in federal agencies in the coming days.
Such developments have weighed on risk sentiment and bolstered expectations for additional Federal Reserve rate cuts before year-end.
Markets are now eyeing the release of the Federal Open Market Committee (FOMC) Minutes later on Wednesday for policy cues. In September, the Fed lowered its benchmark rate by 25 basis points to the 4.00%–4.25% range and signaled the possibility of two further cuts this year. According to the CME FedWatch tool, traders are pricing in an 82% probability of 25 bps rate reductions at each of the remaining 2025 meetings.
Swiss fundamentals remain weak
In Switzerland, rising unemployment and cooling inflation have increased speculation that the Swiss National Bank (SNB) could reintroduce negative interest rates to support the economy. Data released Monday showed the jobless rate ticked up to 3% in September from 2.9% in August, while the monthly Consumer Price Index (CPI) declined by 0.2%, accelerating from a 0.1% fall in August.
The combination of a firm US dollar and soft domestic data continues to weigh on the Swiss franc, keeping USD/CHF near its recent highs. Traders will closely monitor upcoming Fed communications for fresh direction on the pair’s next move.
