Rabobank’s Senior FX Strategist Jane Foley highlights that despite resilient Swiss growth and firm PMI readings, very low inflation leaves little need for imminent SNB tightening. The central bank has signalled a heightened willingness to intervene against Swiss Franc strength, especially while geopolitical risks from the Iran war persist. This stance, alongside low rates, has limited traditional safe-haven inflows into the Swiss Franc so far.
SNB policy and geopolitics shape Franc
“That said, Swiss CPI inflation remains very contained at 0.6% y/y for April for the headline measure and with the core registering a softer than expected 0.3% y/y last month.”
“At its last policy meeting in March, the SNB warned that inflation was likely to increase more strongly in the coming quarters because of the war in Iran.”
“However, the SNB made it very clear in March that its “willingness to intervene in the FX market has increased”.”
“Measured since the last trading day in February, the CHF is the third worst performing G10 currency.”
“Until there is clarity over a peace deal in the Iran war and confidence over a re-opening in the Strait of Hormuz, there is risk of another rush into perceived safe havens.”
USD/CHF gains ground as geopolitical tensions in the Middle East keep the US Dollar supported.
Iran warns it “will respond,” accusing the United States of violating the ceasefire in the Hormozgan region.
Markets continue to price in higher-for-longer Federal Reserve expectations amid elevated Oil prices.
USD/CHF trades with a mild positive bias on Tuesday as renewed military escalation between the United States (US) and Iran supports the US Dollar (USD), pressuring the Swiss Franc (CHF). At the time of writing, the pair is trading around 0.7850, up 0.30% on the day and snapping a four-day losing streak.
American forces carried out “defensive strikes” in southern Iran on Monday, targeting missile facilities and Iranian boats allegedly attempting to deploy naval mines near the Strait of Hormuz. Meanwhile, Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed it had downed a US MQ-9 Reaper drone after it entered Iranian airspace.
In a statement shared by Iran’s IRIB broadcaster, Iran’s Foreign Ministry accused the United States of violating the ceasefire in the Hormozgan region and warned that Tehran “will respond and will not hesitate to defend itself.”
Despite the renewed military escalation, diplomatic efforts between Washington and Tehran continue. US Secretary of State Marco Rubio said on Tuesday that negotiations over a potential deal with Iran could “take a few days,” while stressing that the Strait of Hormuz “has to be open” and “will be open one way or another.”
The Strait of Hormuz remains largely closed, keeping a geopolitical risk premium embedded in global Oil prices and fueling inflation concerns worldwide. Inflation in the United States has accelerated sharply since the war began, reinforcing expectations that the Federal Reserve (Fed) may keep interest rates higher for longer, with traders increasingly pricing in the possibility of another rate hike by the end of the year.
In Switzerland, inflation rose to its highest level in 16 months in April, though it remains within the Swiss National Bank’s (SNB) 0%-2% target range. The SNB is expected to maintain its current policy stance, as the inflationary impact from higher Energy prices has been partly offset by the strength of the Swiss Franc, which helps make US Dollar-denominated commodities such as Oil cheaper in local currency terms.
Although SNB Vice Chairman Martin Schlegel said last week that the central bank maintains an “elevated willingness” to intervene in foreign exchange markets if necessary.
On the data front, traders will closely monitor the US Conference Board (CB) Consumer Confidence report later on Tuesday, followed by Switzerland’s ZEW Survey – Expectations data for May on Wednesday and the US Personal Consumption Expenditures (PCE) inflation report on Thursday.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
0.09%
0.24%
0.19%
0.13%
0.07%
0.52%
0.28%
EUR
-0.09%
0.19%
0.11%
0.07%
0.01%
0.46%
0.20%
GBP
-0.24%
-0.19%
-0.09%
-0.12%
-0.17%
0.28%
0.03%
JPY
-0.19%
-0.11%
0.09%
-0.05%
-0.09%
0.33%
0.12%
CAD
-0.13%
-0.07%
0.12%
0.05%
-0.03%
0.41%
0.16%
AUD
-0.07%
-0.01%
0.17%
0.09%
0.03%
0.44%
0.19%
NZD
-0.52%
-0.46%
-0.28%
-0.33%
-0.41%
-0.44%
-0.24%
CHF
-0.28%
-0.20%
-0.03%
-0.12%
-0.16%
-0.19%
0.24%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
USD/CHF strengthens to around 0.7830 in Tuesday’s early European session.
New US strikes dampen peace deal optimism, supporting the US Dollar.
The pair keeps the negative outlook under the 100-day EMA, with bearish RSI momentum.
The first upside barrier emerges at 0.7840; the initial support level to watch is 0.7808.
The USD/CHF pair edges higher to near 0.7830, snapping the four-day losing streak, during the early European session on Tuesday. Uncertainty surrounding the US-Iran peace negotiations provides some support to the US Dollar (USD) against the Swiss Franc (CHF).
The US military’s Central Command said US forces have carried out strikes on southern Iran in “self-defence,” the Guardian reported on Monday. It said that the military will defend US forces “while using restraint” during the ongoing ceasefire.
Traders will keep an eye on the US April Personal Consumption Expenditures (PCE) Price Index report, which is due later on Thursday. Any signs of persistent inflation in the US could shift market expectations away from rate cuts and lift the Greenback in the near term.
Technical Analysis:
In the daily chart, USD/CHF maintains a bearish near-term tone as the spot holds beneath the 100-day moving average (MA). Price is also trading just under the 20-day Bollinger middle band, underscoring persistent topside pressure despite a modest recovery from recent lows. The Relative Strength Index (14) at 48 remains slightly below the neutral 50 mark, hinting that downside momentum has eased but not yet shifted in favor of the bulls.
On the topside, initial resistance emerges at the 100-day MA at 0.7840. A daily close above this cluster would be needed to alleviate immediate downside pressure and open the way toward the Bollinger upper band near 0.7905. On the downside, the first notable support is seen at the May 26 low of 0.7808. The next contention level is located at the 20-day Bollinger lower band around 0.7760, where failure would suggest a resumption of the broader decline and expose lower lows on the daily chart.
USD/CHF falls as fading safe-haven demand weakens the US Dollar amid growing optimism over a potential US-Iran agreement.
The US and Iran are reportedly close to signing an agreement involving a 60-day ceasefire extension.
SNB’s Martin Schlegel stated the central bank remains highly willing to intervene in foreign exchange markets if necessary.
USD/CHF extends its losing streak for the fourth consecutive day, trading around 0.7820 during the Asian hours on Monday. The pair depreciates as the US Dollar (USD) declines on fading safe-haven demand amid increasing optimism over a potential US-Iran agreement, which has eased broader market concerns about inflation and impending Federal Reserve (Fed) interest rate hikes.
According to an Axios report citing a US official, the United States (US) and Iran are close to signing an agreement that involves a 60-day ceasefire extension. Under this proposed deal, the Strait of Hormuz would be reopened, and Iran would agree to clear mines it deployed in the waterway while allowing ships to pass freely. In exchange for these actions, the United States would lift its current blockade on Iranian ports.
However, the downside of the Greenback could be restrained amid rising inflationary pressures, which have shifted the Fed expectation toward potential future interest rate hikes rather than cuts. Markets are currently pricing in a 45.1% probability that the Fed will raise interest rates by 25 basis points by year-end, according to the CME FedWatch tool.
Meanwhile, investors are continuing to assess the future outlook for Federal Reserve policy. This caution comes after Federal Reserve Governor Christopher Waller signaled that he no longer believes the central bank should retain an easing bias in its official policy statement, adding another layer of complexity to the global economic landscape.
Swiss National Bank (SNB) Vice Chairman Martin Schlegel stated last week that the central bank maintains an elevated willingness to intervene in foreign exchange markets if necessary. Schlegel also noted that Swiss inflation currently remains within the central bank’s price stability range. These remarks signal that policymakers continue to monitor both price developments and currency conditions closely.
Meanwhile, traders are seeking fresh cues regarding whether the Swiss National Bank will call for an exit from its dovish monetary policy stance. This heightened scrutiny comes as rising global inflationary pressures persist, driven largely by elevated international oil prices.
The Swiss Franc ranges around 0.7870 vs. the US Dollar, with investors awaiting US-Iran deal confirmation.
The issues regarding the handover of uranium enrichment by Iran to the US and the authority on Hormuz remain unsolved.
Flash US S&P Global Manufacturing PMI surprisingly expanded at a faster pace to 55.3 in May.
The Swiss Franc trades flat against the US Dollar (USD) around 0.7870 during the Asian trading session on Friday. The USD/CHF pair consolidates as investors await the confirmation of a prolonged peace deal between the United States (US) and Iran, following the announcement that both sides have reached a “final draft” with mediation from Pakistan.
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally higher to near 99.27.
On Thursday, market sentiment turned favorable for riskier assets after the Iranian Labour News Agency (ILNA) reported that a final draft between Washington and Tehran has been reached and a deal can be announced within next few hours.
However, Iran still seems not ready to surrender its enriched uranium and wants recognition of its authority on the Strait of Hormuz, Reuters reports.
On the economic data, front preliminary S&P Global Composite PMI data for May has come in steady at 51.7 as an unexpected strong growth in the manufacturing sector activity offsets the impact of moderate expansion in the Services PMI.
In the Swiss economy, investors seek fresh cues regarding whether the Swiss National Bank (SNB) will call for an exit from its dovish monetary policy stance due to rising global inflationary pressures amid elevated oil prices.
What is the technical outlook for EURUSD, USDCHF and USDCAD?
EURUSD EURUSD prices have recently broken below the 1:1 uptrend, whose lower boundary was at 1.1650. According to the Overbalance methodology, this paves the way for the downtrend to extend, potentially as far as the low at 1.1420. Conversely, for a return to an uptrend, the price would first need to move back above the 1.1650 level, and ideally also break through the 1.1720 level, where the upper limit of the local 1:1 downtrend pattern is located.
EURUSD – H4 chart. Source: xStation USDCHF The USDCHF remains in a long-term downtrend. The price rebounded from a key resistance level at the end of March, leading to a decline of nearly 300 pips. Currently, attention should be paid to a local descending geometric pattern, for which resistance is at the 0.7914 level. Should this level be breached, the price could continue to rise towards the next resistance level at 0.8035. Only a sustained break above this higher level would suggest a shift in the balance of power on the chart. For the time being, however, the base case scenario remains a downtrend.
USDCHF – H4 chart. Source: xStation USDCAD The USDCAD pair shifted sentiment at the start of May, and since then we have seen a local uptrend, supported by a green 1:1 bullish pattern. Should a correction occur, the key support level remains at 1.3723. A break below this level could open the way for a decline towards 1.3630, where the polarity of the previously negated bearish pattern, marked in red, is located.
USD/CHF rises as a hawkish Fed outlook and complex geopolitical developments supported the US Dollar.
Trump stated US-Iran talks are in final stages, but also warned of military action within days if Iran rejects terms.
Traders will likely observe the Q1 Swiss Industrial Production data later in the day.
USD/CHF edges higher after registering modest losses in the previous day, trading around 0.7870 during the Asian hours on Thursday. The pair appreciated as the US Dollar (USD) maintains its footing, driven by a complex mix of geopolitical developments and hawkish monetary policy signals.
Traders are currently weighing the economic implications of tense United States (US)-Iran peace negotiations against renewed threats to the critical Strait of Hormuz shipping lane. Optimism initially surfaced following a Bloomberg report on Wednesday, which quoted US President Donald Trump stating that negotiations with Iran were in their final stages. This raised market expectations that the strategically vital Strait of Hormuz could soon reopen.
Adding to the market’s caution, the geopolitical outlook turned volatile again as President Trump pledged to resume military actions within days if Iran rejects his terms. In response, Iranian President Masoud Pezeshkian struck a defiant tone on the social media platform X, stating that Tehran has no intention of capitulating and calling any attempt to force a surrender through coercion “nothing more than an illusion.”
However, the Federal Open Market Committee (FOMC) Minutes for the April meeting were released on Wednesday, indicating a majority of Federal Reserve (Fed) officials warned that the central bank would likely need to consider raising interest rates if inflation remains persistently above their 2% target. The minutes underscored deepening concerns within the Fed regarding inflation risks driven by the ongoing geopolitical conflict.
On the Swiss side, preliminary data released on Monday showed that the domestic economy expanded by 0.5% quarter-on-quarter in the first three months of the year, accelerating from the 0.2% growth recorded in the previous period. This marked Switzerland’s strongest quarterly performance in a year, signaling a steady economic recovery. Looking ahead, market participants are shifting their focus to the first-quarter 2026 Swiss Industrial Production data due later in the day.
USD/CHF trades flat around 0.7870 in Monday’s early European session.
Markets now see the next Fed interest rate move.
Trump threatened Iran to “get moving” or there “won’t be anything left of them.”
The USD/CHF pair holds steady near 0.7870 during the early European session on Monday. The pair currently trades near the highest since April 30, bolstered by a stronger US Dollar (USD). Traders will closely monitor the developments surrounding the US-Iran conflicts.
Hotter-than-expected US inflation reports released last week have led the market to price in potential US Federal Reserve (Fed) interest rate hikes later this year, supporting the Greenback. According to the CME FedWatch tool, financial markets are now pricing in nearly a 48.4% chance the Fed could hike rates by at least 25 basis points (bps) at its December meeting, compared with 14.3% a week ago.
US President Donald Trump on Sunday warned Iran that the “clock is ticking” as talks to bring the war to an end have stalled. Meanwhile, Iranian media reported the US had failed to make any concrete concessions in its response to Tehran’s latest proposals to end the conflict.
A lack of compromise from Washington and signs of a prolonged conflict could lift the USD against the Swiss Franc (CHF) in the near term. RBC Capital Markets analysts noted that the USD is better shielded from global energy shocks than the CHF because the US operates as a net oil exporter.
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