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USD/CHF hesitates above 0.8200 with markets awaiting trade news

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USD/CHF hesitates above 0.8200 with markets awaiting trade news

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New update 2025.06.10 17:25
USD/CHF hesitates above 0.8200 with markets awaiting trade news

update 2025.06.10 17:25

  • The US Dollar wavers above 0.8200, not far from multi-week lows.
  • FX markets are moving sideways, with investors awaiting news from the US-China meeting.
  • Trump's positive comments feed hopes of a favourable outcome and keep the USD from falling further.

The US Dollar is practically flat against the Swiss Franc on Tuesday. The pair is hesitating above 0.8200, halfway through the last two weeks' trading range, with investors looking from the sidelines, awaiting news from the US-China trade negotiations.

The world's two major economies are expected to continue their talks for a second day, aiming to brush off the differences on thorny issues such as rare earths or chips trade, as their respective economies start to show the scars from a restrictive tariff policy.
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Comments from US President Donald Trump, highlighting the positive reports received from US representatives, are fueling hopes of a positive outcome and keeping safe havens like the CHF at bay. Market movements, however, remain limited, with investors awaiting more specific news from the negotiations.

The Swiss and US calendars are light today with the market's focus on the US Consumer Price Index report, due on Wednesday. Market forecasts point to a moderate increase in yearly inflation, with the headline CPI up to 2.5% from 2.3% and the core inflation accelerating to 2.9% from the previous 2.8%.

These figures endorse the Fed's wait-and-see stance and would have a positive impact on the USD, but any breakthrough from the US-China meeting will send macroeconomic figures to the background. 

Swiss Franc FAQs

The Swiss Franc (CHF) is Switzerland's official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country's economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc's value, causing a turmoil in markets. Even though the peg isn't in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.

The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country's currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.

The Swiss National Bank (SNB) meets four times a year - once every quarter, less than other major central banks - to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.

Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc's (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank's currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.

As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland's main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.



Date

Created

 : 2025.06.10

Update

Last updated

 : 2025.06.10

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