Select Language

USD/CHF ticks down to near 0.7950 despite recovery in US Dollar

Breaking news

USD/CHF ticks down to near 0.7950 despite recovery in US Dollar

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.10.06 14:58
USD/CHF ticks down to near 0.7950 despite recovery in US Dollar

update 2025.10.06 14:58

  • USD/CHF trades subduedly around 0.7950 despite a decent recovery move in the US Dollar.
  • The US Dollar gains ahead of the US Senate's fifth time voting on the stopgap bill.
  • SNB's Schlegel is confident that inflation will accelerate in the coming quarters.

The USD/CHF pair edges down to near 0.7955 during the late Asian trading session on Monday. The Swiss Franc pair faces slight selling pressure even as the US Dollar (USD) recovers firmly, suggesting significant strength in the Swiss Franc (CHF).

The Swiss currency attracts bids as Swiss National Bank (SNB) Chairman Martin Schlegel has expressed confidence that inflationary pressures could accelerate in the coming quarters. "Inflation is expected to rise slightly in the coming quarters," Schlegel said last week, but cited that US pharma tariffs have raised "downside" risks a bit.

The scenario of rising inflation expectations diminishes fears of the SNB pushing interest rates into a negative territory. SNB's Schlegel has already warned that negative borrowing rates could be unfavorable for pensioners and financial institutions.

At the start of the week, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, jumps 0.3% to near 98.00 during late Asian trading hours.

The US Dollar gains even as Washington faces the risk of mass lay-offs in the wake of a partial government shutdown. The US Senate is scheduled to meet on Monday to vote on passing the short-term funding bill. This will be the fifth time that Senators vote on the stopgap bill, which has already been passed by the House of Representatives.

US Dollar FAQs

The US Dollar (USD) is the official currency of the United States of America, and the 'de facto' currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world's reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed's 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed's weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.


Date

Created

 : 2025.10.06

Update

Last updated

 : 2025.10.06

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Gold Price Forecast: XAU/USD drifts higher above $3,950 on global uncertainty

Gold price (XAU/USD) extends its rally to around $3,970 during the early Asian session on Tuesday. The precious metal edges higher on political uncertainty across the globe and the expectation of a US interest rate cut.
New
update2025.10.07 08:56

USD/JPY posts modest gains above 150.00 on political stability concerns in Japan

The USD/JPY pair edges higher to near 150.35, the highest since August 1, during the early Asian session on Tuesday. The Japanese Yen (JPY) weakens against the US Dollar (USD) on political stability concerns after Japan's ruling Liberal Democratic Party (LDP) elected a new leader.
New
update2025.10.07 08:00

NZD/USD Price Forecast: Bulls eye a break above 200-day SMA

The New Zealand Dollar advances on Monday and trades near its daily close at around 0.5840 as Tuesday's Asian session begins. Yesterday, the pair gained 0.20% but key resistance lies overhead with the 200-day Simple Moving Average (SMA) at 0.5848.
New
update2025.10.07 07:34

EUR/USD falls on French political shock and shutdown lift Dollar

EUR/USD retreats during the North American session sponsored by political turmoil in France and US Dollar strength, amid the sixth day of government shutdown in the US. The pair trades at 1.1714, down 0.24%.
New
update2025.10.07 07:02

Fed Schmid: The Fed must maintain inflation credibility

The President of the Kansas City Federal Reserve Bank Jeffrey Schmid crossed the newswires on October 6. He delivered hawkish remarks, saying that the Fed must maintain its inflation credibility and stressed that inflation is too high. He added that monetary policy is appropriately calibrated.
New
update2025.10.07 07:02

Gold blasts past $3,950 as shutdown, uncertainty fuels haven rush

Gold price rallies to a new record high past the $3,900 figure on Monday, hitting $3,970 as the US government continues its shutdown, while investors are pricing in another rate cut by the Federal Reserve (Fed) at the upcoming October 29 meeting.  XAU/USD trades at $3,952, up 1.73%, at the time of w
New
update2025.10.07 03:49

Australian Dollar rises as Greenback softens on shutdown, dovish Fed outlook

The Australian Dollar (AUD) trades on the front foot against the US Dollar (USD) on Monday, extending its recovery as the Greenback's early strength fades. The pair rebounds toward the upper end of its recent consolidation band after swinging sharply in both directions earlier in the day.
New
update2025.10.07 03:40

Dow Jones Industrial Average wobbles near record highs

The Dow Jones Industrial Average (DJIA) struggled to keep its footing on Monday, kicking off the new trading week opening at record highs above 46,800. The Dow slipped early on Monday after investors briefly showed frayed nerves, but general market sentiment continues to drift into the high side.
New
update2025.10.07 03:05

FX Today: Fedspeak expected to grab all the attention

The US Dollar (USD) rose to multi-day highs on Monday, propped up almost exclusively by the strong depreciation of the Japanese Yen.
New
update2025.10.07 02:45

ECB's Lagarde declares disinflation process over, floats Euro as global currency candidate

European Central Bank (ECB) President Christine Lagarde confidently declared the ECB has achieved its disinflation targets while testifying before the European Parliament's Economic and Monetary Affairs Committee.
New
update2025.10.07 02:36

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel