- USD/CHF holds gains at a nearly seven-month high of 0.8091.
- The US Dollar gains support as a renewed US-Iran peace deal lifts safe-haven demand.
- The SNB will sell Swiss Francs if rapid appreciation threatens price stability.
USD/CHF remains stronger for the fourth consecutive day, trading around 0.8080 during the Asian hours on Monday. The pair remains close to a nearly seven-month high of 0.8091, reached on June 19, as the US Dollar (USD) receives support from safe-haven demand, which could be attributed to renewed concerns over a US-Iran peace deal.
CNBC reported on Sunday that US President Donald Trump threatened direct strikes on Iran if Hezbollah continues its attacks on Israel. This warning has severely clouded the outlook for diplomatic progress between Washington and Tehran, completely dismantling the current peace framework, even as Vice President JD Vance met with Iranian officials for the first round of talks under an interim deal.
Meanwhile, Tehran simultaneously announced it had once again closed the strategic Strait of Hormuz. While Iranian state media reported that Tehran had completely suspended negotiations in response to Trump’s remarks, sources close to the matter indicated that discussions are quietly ongoing.
Moreover, the Greenback receives support as the Federal Reserve (Fed) adopted a decidedly hawkish tone after keeping interest rates steady last week. Notably, 9 out of 19 Fed policymakers now project at least one interest rate hike this year, with market investors pricing in a potential increase as early as September.
Swiss National Bank (SNB) President Martin Schlegel reaffirmed the central bank’s readiness to intervene in the foreign exchange market, stating they will sell Swiss francs (CHF) if rapid appreciation threatens price stability.
With inflation remaining subdued within the 0–2% target range and minimal upward pressure ahead, the SNB held its policy rate steady for a fourth straight meeting, indicating no near-term plans to tighten policy.
