USD/CHF trades near two-week high amid Fed caution, SNB dovishness

• USD/CHF holds around 0.8030, near a two-week high, supported by a stronger US Dollar.
• Jerome Powell tempers expectations of further interest rate cuts, pushing US Treasury yields higher.
• The Swiss National Bank maintains an expansive policy and remains ready to intervene if needed.

USD/CHF trades slightly higher on Friday, up 0.15% for the day at 0.8030 at the time of writing, extending its advance near a two-week high at 0.8037. The US Dollar (USD) remains firm after the Federal Reserve (Fed) cut interest rates while adopting a more cautious tone regarding the future path of monetary policy.

On Wednesday, the Fed lowered the federal funds rate by 25 basis points to a range of 3.75%-4.00%, in line with expectations. However, Fed Chair Jerome Powell said that another rate cut in December "is not a foregone conclusion, far from it," cooling expectations for further easing. The yield on the benchmark 10-year Treasury note has surged to 4.10%, its highest level in three weeks, lending additional support to the Greenback.

At the same time, the prospect of a renewed trade truce between the United States and China has also supported the USD. US President Donald Trump and Chinese President Xi Jinping agreed on a one-year ceasefire that includes lower US tariffs and China's commitment to resume purchases of US agricultural goods. This development has helped sustain the US Dollar's upward momentum.

On the Swiss side, remarks from Swiss National Bank (SNB) Governing Board Member Petra Tschudin weighed on the Swiss Franc (CHF). Tschudin reaffirmed that monetary policy remains "expansive" and that the SNB stands ready to intervene in the foreign exchange market if necessary, even reintroducing negative interest rates if required. She emphasized that the level of the Franc itself is less important than its effect on inflation, which remains within the range of price stability.

In this context, the combination of a cautious Federal Reserve and a persistently dovish SNB keeps the USD/CHF bias tilted to the upside, as traders await speeches from Fed officials later in the day to refine their expectations ahead of the December meeting.