USD/CHF edged up to 0.8050 during Thursday’s Asian session as the US Dollar drew strength from the Federal Reserve’s measured approach in its latest FOMC Meeting Minutes. The minutes reflected policymakers’ concerns over ongoing inflation while keeping rates within the 4.25%–4.50% range despite mounting calls for a loosening of policies. Traders, however, are pricing in an 82% likelihood of a Fed rate cut in September, with markets waiting for clarification from Fed Chair Jerome Powell’s speech at Jackson Hole. From the Swiss side, inflation is still contained below the SNB target of 2%, while the just-imposed 39% US tariff on imports from Switzerland is likely to exert pressure on the export-dependent economy of Switzerland and push the Swiss National Bank to further ease. Coming Swiss Trade Balance data and US PMI readings are still under the spotlight.
KEY LOOKOUTS
• The Fed’s conservative approach to inflation risks underpinned the US Dollar, as markets now price in a 82% probability of a September rate cut.
• Marketers look forward to the comments from Fed Chair Jerome Powell, who may bring new policy indications for the September meeting.
• A recently introduced 39% US tariff on Swiss imports jeopardizes Switzerland’s export-oriented economy and could force the SNB to further ease.
• Swiss Trade Balance numbers and US PMI are under the spotlight for short-term market direction in USD/CHF.
USD/CHF is quoting around 0.8050 as the US Dollar gains on the heels of the Federal Reserve’s prudent tone during its July meeting minutes, when inflation risks were given precedence over labor issues. Market sentiment perceives an 82% chance of a September rate cut, and investors are now looking forward to Jerome Powell’s Jackson Hole speech for more cues. On the Swiss side, low inflation below the SNB’s 2% target and the imposition of a new 39% US tariff on Swiss imports challenge the export-oriented economy, which could heighten pressure on the central bank to embrace more easing measures. Traders now look to the Swiss Trade Balance data and US PMI numbers for further direction.
USD/CHF creeps higher to 0.8050 with the US Dollar finding support in the Fed’s guarded approach to inflation. Investors watch out for Powell’s Jackson Hole speech, Swiss Trade Balance figures, and US PMIs for new direction in markets.
• USD/CHF hovers around 0.8050, bouncing back from a 0.5% decline in the last session.
• FOMC Minutes indicated policymakers were being cautious, focusing more on inflation risks rather than labor issues.
• Fed funds futures show an 82% probability of a September rate cut.
• Markets hold their breath for Jerome Powell’s Jackson Hole speech to see policy clarity.
• The US applied a 39% tariff on Swiss imports, jeopardizing Switzerland’s export-based economy.
• Swiss inflation continues below the SNB’s 2% target, raising expectations for more easing.
• Traders look to near-term guidance from Swiss Trade Balance releases and US PMI print.
The US Dollar appreciated following the release of the most recent Federal Reserve meeting minutes, which indicated that policymakers are still cautious, prioritizing inflation concerns in their decisions. While interest rates were unchanged, markets are broadly anticipating a rate cut in September, with traders taking keen interest in Fed Chair Jerome Powell’s address at the Jackson Hole Symposium for further policy cues. The prudent stance underscores the Fed’s fine balancing act between inflation risk and economic stability.
USD/CHF DAILY PRICE CHART
SOURCE: TradingView
On the Swiss side, economic woes are mounting with the new 39% US tariff on imports from Switzerland poised to jeopardize the nation’s export-based economy. With inflation well beneath the Swiss National Bank target of 2%, expectations for additional monetary easing continue to be high. Investors will also be paying close attention to future Swiss Trade Balance readings, which will provide further clarity on the state of Switzerland’s economy in resistance to outside pressures. Later in the day, US PMI releases will provide further insight into business activity and the health of the economy overall.
TECHNICAL ANALYSIS
USD/CHF is consolidating at around the 0.8050 level following its recent drop, indicating short-term buying interest. The pair is coming across immediate support at around the 0.8020 area, with the next resistance at around 0.8085. A firm breach above this area could lead the way toward 0.8120, while a fall below 0.8020 could see additional downside risks toward 0.7980. Overall, momentum indicators indicate consolidation, with traders waiting for fresh leads from upcoming economic data releases.
FORECAST
If USD continues to ride on the momentum from the Fed’s dovish policy and upcoming Powell comments at Jackson Hole, USD/CHF may continue its rise above the 0.8085 resistance. Firm US PMI prints would add more weight to the argument in favor of the pair going higher, moving the pair towards 0.8120 and even around short term.
Conversely, if Swiss Trade Balance numbers are higher than anticipated or if risk appetite increases, then the Swiss Franc might recover some of its lost ground. A breakdown below the 0.8020 support level might take USD/CHF lower towards 0.7980, with additional losses being potential if expectations of Fed rate cuts in September build.
