The CHF to USD exchange rate has recently faced downward pressure, with the Swiss Franc (CHF) trading at 14-day lows near 1.2370, approximately 1.2% below its three-month average of 1.2516. The CHF has shown stability within a narrow range of 3.1%, fluctuating between 1.2335 and 1.2723.
Recent forecasts for the US dollar (USD) indicate a period of volatility driven by mixed job data and expectations of Federal Reserve policy adjustments. While payrolls surged to a five-month high in September, an unexpected rise in unemployment has raised speculations about potential dovish shifts in monetary policy, particularly regarding future interest rate cuts. Analysts suggest that unless the upcoming S&P PMIs show a robust performance, the USD may continue to struggle.
On the Swiss side, the Swiss National Bank (SNB) has maintained a zero interest rate policy due to apprehensions about the economic impact of newly imposed US tariffs, specifically affecting Switzerland's machinery and watchmaking industries. The SNB's significant increase in foreign currency purchases—totaling over 5 billion Swiss francs—highlights its proactive approach to mitigate the franc’s appreciation against the dollar post-tariff announcement.
Additionally, an unexpected dip in Swiss inflation to 0.1% in October further complicates the picture for SVN policy. Economists note that despite the current economic turbulence, Switzerland does not appear to pursue competitive currency devaluation as affirmed by a recent joint statement with the US Treasury.
Given these dynamics, both the CHF and USD are navigating a complex backdrop of international trade tensions and internal economic indicators. Market participants are encouraged to remain vigilant as upcoming data releases and global economic developments could shift exchange rate trajectories.
