CHF

• 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.

• 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.

• USD/CHF appreciates as the US Dollar gains on geopolitical Middle East risks.
• MUFG Bank warns the US Dollar could appreciate if Washington and Tehran fail to finalize a ceasefire extension.
• The Swiss Franc could receive support from a resilient domestic economy.

USD/CHF edges higher after registering modest losses in the previous day, trading around 0.7840 during the Asian hours on Friday. The pair caught in a tug-of-war between lingering geopolitical risks in the Middle East and stronger-than-expected economic data from Switzerland.

Analysts at MUFG Bank have warned that the US Dollar (USD) could appreciate if Washington and Tehran fail to finalize a ceasefire extension. An unresolved conflict threatens to build global inflationary pressures, a scenario that could push US Treasury yields higher and shift the Federal Reserve’s (Fed) internal consensus toward a more hawkish monetary policy stance to combat rising prices.

While the United States (US) and Iran have tentatively agreed to a 60-day ceasefire extension, the market’s initial relief remains capped. The potential breakthrough promises to allow unrestricted shipping through the critical Strait of Hormuz, with Iran reportedly committing to clear all maritime mines from the waterway within 30 days.

However, traders are maintaining a cautious stance following a CNN report that US President Donald Trump has yet to approve the final terms. Further dampening immediate optimism, Vice President JD Vance noted that Washington was “not there yet” on a final deal, despite being close, while firmly reminding markets that the US remains positioned to substantially set back Tehran’s nuclear program if necessary.

However, the Swiss Franc (CHF) found support from a resilient domestic economy, preventing a runaway rally for the USD/CHF pair. Switzerland’s non-farm payrolls accelerated in the first quarter of 2026, rising 0.5% year-on-year to 5.537 million, up from a 0.2% gain in the previous quarter. This labor market growth was primarily driven by the services sector, which expanded by 0.6% to 4.409 million due to strong administrative and support activity. Additionally, the industrial sector showed signs of stabilization, recovering by 0.1% to 1.129 million after contracting by the same margin in the final quarter of last year.

Further underpinning the Swiss economic outlook is a notable recovery in investor confidence. The latest UBS & CFA Society Switzerland survey revealed that Swiss investor sentiment improved significantly to -11.1 in May 2026, up from the dismal -30.3 recorded in May 2025. Although the index technically remains in negative territory, the sharp rise reflects a much less pessimistic outlook among financial professionals. This stabilizing view is reinforced by the fact that approximately 75% of surveyed analysts now expect economic conditions in Switzerland to remain unchanged over the next six months, suggesting a baseline of steady, if quiet, resilience.