USD/CHF rises above 0.8250 as Fed sees no rush to interest rate cuts

• USD/CHF gains above 0.8250 as the US Dollar capitalizes on the Fed's guidance that policymakers await more clarity on the US economic outlook.
• The White House is expected to unveil a bilateral trade deal with the UK.
• SNB's Schlegel has opened doors for negative interest rates to maintain price stability.

The USD/CHF pair moves higher above 0.8250 during European trading hours on Thursday. The Swiss Franc pair gains as the US Dollar (USD) trades higher after the Federal Reserve (Fed) signaled that it is in no hurry to lower interest rates. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, jumps to near 100.20.

On Wednesday, the Fed left interest rates steady in the range of 4.25%-4.50% for the third time in a row amid uncertainty over how new economic policies announced by United States (US) President Donald Trump will shape the economic outlook. "My gut tells me that uncertainty is extremely elevated," Fed Chair Jerome Powell said and warned that risks to both inflation and unemployment have skewed "on the upside".

Another reason behind the strength of the US Dollar is confirmation from US President Trump that the White House has signed a bilateral trade deal with one of its trading partners, which he referred to as a "highly respected country". The reports from The New York Times (NYT) have stated that the country is the "United Kingdom".

Still, investors brace for volatility in the US Dollar as both the US and China have confirmed trade discussions on Saturday in Switzerland. US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer said that they will meet their Chinese counterparts, aiming to de-escalate the trade war.

Meanwhile, the Swiss Franc (CHF) underperforms its peers as Swiss National Bank (SNB) Chairman Martin Schlegel has signaled that the central bank could take interest rates to negative in an attempt to maintain price stability. "No one likes negative rates, but if we have to, we are prepared to do it again," Schlegel said on Tuesday.

Swiss consumer inflation expectations have accelerated due to the appreciating Swiss Franc. Global economic uncertainty due to the fallout of tariffs announced by US President Trump has increased the safe-haven appeal of the Swiss Franc.