The USD/CHF pair held its two-day recovery around 0.7930 during late Asian hours on Friday, supported by broad US Dollar (USD) strength following the Federal Reserve’s (Fed) latest policy move. The Fed reduced interest rates by 25 basis points (bps), bringing the target range to 4.00%–4.25%.
Dollar supported by Fed guidance
The US Dollar Index (DXY), which tracks the Greenback against six major peers, steadied near 97.50, extending its recent two-day advance. Analysts noted that the Fed’s decision to ease policy was largely priced in, but Chair Jerome Powell’s comments on a cautious, gradual approach to further cuts helped bolster the USD. The central bank’s updated dot plot suggested two additional rate cuts before year-end.
US data adds to support
On the data front, US Initial Jobless Claims for the week ending September 12 fell to 231K, beating expectations of 240K and well below the previous reading of 264K. Stronger labor market data reinforced the case for the Fed’s measured stance. Investors now await remarks from San Francisco Fed President Mary Daly, scheduled for 18:30 GMT on Friday, for further policy cues.
Focus shifts to SNB decision
Looking ahead, attention in the Swiss Franc (CHF) market turns to the Swiss National Bank’s (SNB) policy decision due next Thursday. Speculation lingers that the SNB could consider pushing rates deeper into negative territory as subdued inflation persists. Such a move would likely trigger heightened volatility in CHF pairs, including USD/CHF.
