The offshore yuan traded around 6.75 per dollar on Wednesday, remaining close to its strongest level since February 2023 after the People’s Bank of China unveils fresh measures designed to deepen global usage of the Chinese currency. The central bank said it will expand access to yuan liquidity through its Foreign and International Monetary Authorities (FIMA) repo facility, enabling foreign central banks, sovereign wealth funds, and other official institutions to borrow yuan against holdings of Chinese government bonds and other eligible securities. The announcement marks another step in Beijing’s long-running campaign to internationalize the yuan and reduce reliance on the US dollar in global finance. Reflecting this ambition, China’s latest five-year plan pledged to advance yuan internationalization, while President Xi Jinping has emphasized the objective of building a strong and influential global currency.
Swiss Franc declines as market caution lifts US Dollar
- USD/CHF appreciates as the US Dollar remains stronger amid market caution ahead of further US-Iran peace talk updates.
- Traders price in the odds of the Fed holding interest rates steady at 3.50% to 3.75% this Wednesday.
- Money markets expect the Swiss National Bank to keep interest rates unchanged through the end of the year.
USD/CHF gains ground after registering modest losses in the previous day, trading around 0.7950 during the Asian hours on Tuesday. The pair appreciates as the US Dollar (USD) holds steady amid broad market caution. Investors remain on the defensive as they await further updates regarding Iran’s unresolved nuclear program.
Both Washington and Tehran have not released the official text of the agreement; major shipping lines are delaying vessel rerouting through the strategic waterway until full transparency is established.
Even though US President Donald Trump announced that a memorandum of understanding (MoU) has been signed to end the conflict and reopen the blockaded Strait of Hormuz, market participants remain deeply cautious. According to Iran’s semi-official Mehr news agency, the current draft calls for the strait to reopen within 30 days under Iranian arrangements.
The Federal Reserve (Fed) is widely expected to keep its benchmark interest rate unchanged at a target range of 3.50% to 3.75% on Wednesday, which could be attributed to the higher US inflation due to elevated energy prices linked to Middle East tensions. Traders will be closely monitoring the press conference for cues on how new Fed Chair Kevin Warsh intends to lead the central bank into its next era.
Sharp declines in oil prices have helped alleviate inflationary pressures, reducing expectations for further monetary tightening. Consequently, money markets are now pricing in no additional interest rate changes from the Swiss National Bank (SNB) for the remainder of the year.
This aligns with the latest data showing Swiss Producer and Import Prices fell 1.8% year-on-year in May. While this marks the softest pace of deflation in five months, easing from April’s 2.0% decline due to slower drops in import prices, the monthly figures caught markets off guard. On a month-over-month basis, the price index fell 0.4%, missing forecasts for a 0.4% increase and reversing April’s 0.8% gain.
Swiss Franc edges higher on US–Iran peace deal
- USD/CHF falls to around 0.7930 in Monday’s early European session.
- US and Iran confirmed a ‘peace deal’ was reached, signing in Switzerland on Friday.
- The Fed is widely anticipated to keep its interest rate steady as it remains in “wait-and-see” mode.
The USD/CHF pair slumps to near 0.7930, the lowest since June 5, during the early European trading hours on Monday. The US Dollar (USD) weakens against the Swiss Franc (CHF) after the US and Iran announced a framework deal for peace. Traders brace for the US Federal Reserve (Fed) interest rate decision later on Wednesday.
US President Donald Trump on Sunday announced a “great deal” to end the war with Iran. Iran’s National Security Council stated that the US naval blockade will be lifted immediately and the war will end on all fronts, including Lebanon. Pakistan’s Prime Minister Shehbaz Sharif said that the official signing ceremony for the “peace deal” will take place on Friday in Switzerland. Signs of progress in the US-Iran peace agreement boost the CHF and create a headwind for the pair.
The US central bank is set to keep its benchmark interest rate unchanged at a target range of 3.50% to 3.75% at its upcoming policy meeting on Wednesday. Traders will closely monitor the press conference and take more cues about how new Fed chair Kevin Warsh will lead the US central bank into its next era. Any hawkish remarks from Fed officials could lift the Greenback and act as a headwind for the major pair.
Markets have priced in nearly a 64% chance of a Fed interest rate hike in December this year after the peace deal, down from 69% last week, according to the CME FedWatch tool.
Swiss Franc strengthens as US Dollar struggles despite increased risk aversion
USD/CHF may rebound as the US Dollar may regain ground on safe-haven demand from ongoing Middle East conflicts.
Israel’s Home Front Command issued an early warning following rocket launches from Lebanon targeting northern Israel.
Softer UBS capital rules being considered by Swiss lawmakers could shave off billions in regulatory burdens, potentially weakening the CHF.
Swiss Franc strengthens as US Dollar struggles despite increased risk aversion
USD/CHF depreciates after four days of gains, trading around 0.7990 during the Asian hours on Thursday. However, the downside of the pair could be restrained as the US Dollar (USD) may regain its ground amid rising safe-haven demand due to ongoing Middle East conflict.
Israeli military says that the Home Front Command, the branch of the Israel Defense Forces (IDF) responsible for civil defense, issues an early warning after launches from Lebanon toward northern Israel.
Earlier, US Central Command (CENTCOM) confirmed that the US began airstrikes in Iran on Wednesday. Furthermore, President Donald Trump warned of severe military action if an interim peace deal is not finalized, accusing Tehran of stalling. Iranian officials, however, maintain they will not back down.
Following an incident where an American helicopter was shot down, the US launched “self-defense” strikes, triggering Iranian retaliatory attacks on US military facilities in Bahrain, Jordan, and Kuwait.
Adding to the crisis, the Islamic Revolutionary Guard Corps (IRGC) announced an immediate, total closure of the Strait of Hormuz to all commercial and oil vessels, warning that any transit attempts would be targeted.
May’s US CPI matched forecasts, rising to 4.2% YoY (up from 3.8% in April), while Core CPI ticked up to 2.9% YoY from 2.8%. Market attention now shifts to the upcoming release of the May Producer Price Index (PPI) and Initial Jobless Claims later today.
Swiss lawmakers are considering a new pitch to soften capital requirements on UBS, if implemented, could shave billions of dollars off the burden the bank is facing under a draft law submitted by the government, sources told Reuters.
If implemented, the move would likely have a short-to-medium-term weakening effect on the Swiss Franc (CHF). While it sounds like a paradox, helping Switzerland’s biggest bank making the currency drop, it boils down to central bank mechanics, market capital flows, and safe-haven dynamics.
Under the government’s original draft law, UBS would have been forced to fully back its foreign subsidiaries
CHF declines as safe-haven demand supports US Dollar
- USD/CHF rises as safe-haven US Dollar demand increased after Israel intercepted a missile fired from Yemen.
- The Greenback may further advance as strong US jobs data boost expectations of a Fed interest rate hike this year.
- The Swiss Franc struggles after May inflation fell to 0.6%, missing the 0.8% forecast and reducing rate hike expectations.
USD/CHF extends its gains for the second successive day, trading around 0.7970 during the Asian hours on Monday. The pair gains ground as the US Dollar (USD) remains firm amid increased safe-haven demand after the Israeli military stated a missile had been launched from Yemen towards Israeli territory, which has been intercepted by its aerial defense systems.
The Guardian reported that air raid sirens sounded in Tel Aviv, following the attack from Yemen. The retaliatory attacks from Yemen, whose military force, the Houthis, is backed by Iran, reflect that conflicts in the Middle East have started again.
The BBC reported on Monday that the Israel Defense Forces (IDF) reportedly struck military targets in Iran following an Iranian missile salvo aimed at northern Israel. This escalation occurred despite US President Donald Trump’s criticism of previous Israeli strikes in Beirut and his active push for a diplomatic resolution between Prime Minister Netanyahu and Tehran.
Earlier, Iran launched multiple rounds of missiles toward Israel, warning against further military action in Lebanon and threatening a fragile ceasefire amidst stalled peace negotiations. Although Israel’s military reported that all incoming missiles were successfully intercepted with no casualties, the escalation severely rattled energy markets.
The Greenback received support after stronger-than-expected US employment data reinforced expectations that the Federal Reserve (Fed) could raise interest rates later this year. US Nonfarm Payrolls (NFP) increased by 172,000 jobs in May, compared to 179,000 (revised from 115,000) in the previous reading, and the Unemployment Rate held at 4.3% during the same period.
The Swiss Franc (CHF) weakened against the US Dollar after May’s inflation came in at 0.6%, missing the 0.8% forecast and dampening rate-hike expectations. Despite the slight rise, Swiss National Bank (SNB) Chairman Martin Schlegel noted that medium-term inflation pressures remain stable. Consequently, investors now expect the SNB to hold its key interest rate steady at 0% through 2026.
CHF rises as USD slips on Israel-Lebanon ceasefire news
- USD/CHF falls as the US Dollar struggles on easing risk aversion after Israel and Lebanon renewed their ceasefire on Wednesday.
- The Greenback may regain its ground as strong May jobs data fuels expectations that the Fed will raise interest rates.
- Schlegel said recently that the SNB is ready to intervene against Middle East-driven Swiss Franc overvaluation pressures.
USD/CHF halts its three-day winning streak, trading around 0.7910 during the Asian hours on Thursday. The pair depreciates as the US Dollar (USD) loses ground on easing risk aversion following the news that Israel and Lebanon on Wednesday agreed to renew a ceasefire. However, it would require a “complete cessation” of fire by Iran-backed Hezbollah. The agreement was announced in a joint statement after US-led talks in Washington.
The Israel and Lebanon do not have formal diplomatic relations, though also agreed to establish several “pilot security zones” in which the Lebanese armed forces “will take exclusive control of the territory to the exclusion of all non-state actors.”
The downside of the USD/CHF pair could be restrained as the Greenback may regain its ground amid rising expectations that the US Federal Reserve (Fed) will raise interest rates this year. Stronger-than-expected US jobs data, including the May ADP private payrolls and JOLTS job openings, suggested a resilient US labor market. These reports might prompt traders to raise their bets that the Fed will keep interest rates higher for longer.
Market expectations have shifted dramatically as the war in Iran continues to disrupt energy markets, driving up oil prices and fueling inflation. Consequently, traders are adjusting to a more hawkish outlook, with the CME FedWatch Tool now pricing in a nearly 42% probability of a Federal Reserve interest-rate hike in December.
Swiss National Bank (SNB) Chairman Martin Schlegel noted that the Swiss Franc’s real overvaluation is notably lower than its nominal overvaluation. Schlegel added that the central bank has increased its readiness to intervene in the foreign exchange market to counter safe-haven appreciation pressures driven by escalating tensions in the Middle East.
Swiss Franc remains calm ahead of Trade Balance data
- USD/CHF stabilizes as the US Dollar gains safe-haven support following reports that Iran halted indirect negotiations with America.
- The Greenback rose as renewed Middle East tensions fueled inflation fears and expectations of elevated Federal Reserve interest rates.
- Despite a minor GDP miss, Swiss consumer and industrial activity demonstrated remarkable resilience.
USD/CHF moves little after registering modest gains in the previous day, trading around 0.7870 during the Asian hours on Tuesday. The pair steadies as the US Dollar (USD) remains firm on increased safe-haven demand after Tasnim news agency indicated that Tehran has halted indirect negotiations with the United States. Traders await the Swiss Trade Balance data release due later in the day.
According to the report, Iran and its “Resistance Front” allies, spanning Yemen, Lebanon, and Iraq, have established an agenda to completely block the critical Strait of Hormuz and activate additional fronts, including the Bab el-Mandeb Strait, as a means to punish Israel and its supporters.
The escalation was further compounded by an Axios report on X stating that Iran deployed additional naval mines in the strait last week. These combined developments pose a severe obstacle to a swift resolution of the crisis, which has already effectively shut down the Strait of Hormuz, a vital chokepoint for global oil and liquefied natural gas supplies.
Renewed tensions in the Middle East continue to fuel global inflation concerns and stoke expectations of elevated Federal Reserve (Fed) policy rates. Reflecting these persistent inflationary pressures, financial markets are now pricing in a potential Federal Reserve (Fed) rate hike before the year ends, with the CME FedWatch tool currently indicating a 39% probability of a quarter-point increase in December.
On Monday, recent economic data from Switzerland presented a mixed but generally strong picture of the country’s financial health. On the growth front, Switzerland’s Gross Domestic Product (GDP) expanded by 0.4% quarter-on-quarter in the three months to March, falling slightly short of initial market estimates that had predicted a 0.5% expansion.
Despite the minor GDP miss, consumer and industrial activity showed remarkable resilience. Retail sales in Switzerland surged by 1.6% year-on-year in April 2026, far exceeding market expectations for a modest 0.2% rise and following an upwardly revised 1% gain in the previous month.
Compounding this positive momentum, the country’s industrial sector saw a significant boost as the procure.ch–UBS Manufacturing PMI jumped to 57.3 in May 2026 from 54.5 in April. This reading easily beat the market forecast of 54, marking the highest level of manufacturing expansion Switzerland has seen since July 2022.
Swiss Franc weakens ahead of Q1 GDP data release
- USD/CHF rises as the Swiss Franc weakens ahead of key Swiss Retail, GDP, and PMI data.
- The US Dollar strengthens on safe-haven demand as investors closely monitor fluid US-Iran peace negotiations.
- Geopolitical uncertainty intensified after Israel ordered its troops to advance further into Lebanon.
USD/CHF gains ground after two days of losses, trading around 0.7830 during the Asian hours on Monday. The pair gains ground as the Swiss Franc (CHF) weakens ahead of the release of key economic data including, Swiss Real Retail Sales for April, Q1 Gross Domestic Product, and May’s SVME – Purchasing Managers’ Index (PMI). Traders will shift their focus on the Institute for Supply Management’s (ISM) Manufacturing PMI, which provides a reliable outlook on the state of the US manufacturing sector.
The USD/CHF pair appreciates as the US Dollar (USD) maintains its strength on increased safe-haven demand, driven by market participants closely assessing the highly fluid developments surrounding United States (US)-Iran peace negotiations.
US President Donald Trump seeks to alter and reinforce several key terms of the proposal aimed at ending the US-Israel war on Iran. According to the BBC, these requested changes specifically target regulations surrounding the strategic Strait of Hormuz and the mandatory removal of highly enriched uranium.
Axios further reported that Trump wants to tighten multiple points of the deal he deems critical, particularly the handling and disposal of Iran’s nuclear material. A senior US official noted that Trump has been briefed that a formal response from Iran regarding these adjusted terms could take up to three days.
The geopolitical uncertainty continues to increase after Israel has ordered its troops to advance further into Lebanon, marking a tactical escalation in its conflict with the Iran-backed militant group Hezbollah. The military push comes despite a ceasefire agreement announced more than six weeks ago, severely threatening to unravel earlier diplomatic progress.
