USD/CHF fell for a second straight session on Wednesday, extending its pullback from the nearly three-week high above 0.8100 reached earlier this week. Persistent US Dollar weakness continues to pressure the pair, driving it toward the mid-0.8000s and closer to the lower end of its weekly trading range.
USD pressured by dovish Fed expectations
The US Dollar Index (DXY) dropped to a one-week low after Tuesday’s delayed US data set reinforced expectations for near-term Federal Reserve easing. US PPI figures pointed to cooling inflation, Retail Sales disappointed for September, and consumer confidence fell to a seven-month low – all underscoring concerns about the softening labor market and giving the Fed more room to cut rates.
Fed officials have leaned dovish in recent days. New York Fed President John Williams noted that rate cuts could arrive in the near term without jeopardizing inflation goals. Governor Christopher Waller signaled support for a quarter-point cut at the December meeting, while Governor Stephen Miran argued that labor-market deterioration justifies larger cuts to bring policy back toward neutral.
Markets now assign roughly an 85% probability to a 25 bp cut in December, adding further downside pressure to the USD.
SNB steady outlook reinforces CHF strength
In contrast, the Swiss National Bank is expected to maintain its policy rate at 0.00% for an extended period, with forecasts suggesting no changes through 2027. The SNB’s stable policy backdrop, paired with rising Fed easing expectations, favors continued CHF resilience and supports prospects for additional downside in USD/CHF.
Catalysts ahead
Traders now turn to the delayed US Durable Goods Orders report and weekly jobless claims for fresh cues. These data points could influence near-term USD sentiment and provide short-term direction for USD/CHF; however, the broader bias remains skewed toward further weakness while the dollar stays under dovish pressure.
