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Swiss Franc slips to seven-month lows ahead of ZEW Survey Expectations

  • USD/CHF reached a seven-month high of 0.8107 on Wednesday.
  • The US Dollar rises due to robust domestic economic data alongside a complex, mixed geopolitical landscape.
  • The SNB raised its inflation forecast and reaffirmed its readiness to intervene in forex markets to curb Franc strength.

USD/CHF extends its gains for the sixth successive day, reaching a seven-month high of 0.8107 during the Asian hours on Wednesday. The pair rises as the Greenback strengthens on the complex Middle East situation. Traders will likely observe the Swiss ZEW Survey – Expectations for June and the Q2 SNB Quarterly Bulletin due later in the day.

US President Donald Trump stated that Iran had “fully and completely” agreed to open its facilities to nuclear inspections, while Iranian Foreign Minister Abbas Araghchi quickly tempered expectations by clarifying that substantive nuclear negotiations have not actually begun.

Additionally, Iran’s chief negotiator issued a stern warning that the strategic Strait of Hormuz will never return to its pre-war status and will remain firmly under Iranian oversight. Meanwhile, diplomatic efforts showed signs of progress elsewhere as Washington hosted a fresh round of talks between Israel and Lebanon, aimed at securing a ceasefire with Iran-backed Hezbollah.

June’s flash estimate for the US S&P Global Composite Purchasing Managers’ Index (PMI) climbed to 52.2, comfortably beating May’s reading of 51.5 and signaling healthy business expansion. The US manufacturing sector showed remarkable resilience, with output jumping to 55.7 from the previous month’s 55.1, easily outperforming forecasts of 54.8. Simultaneously, the Services PMI printed at 51.3, ticking up from May’s 50.7 and clearing the consensus estimate of 51.0, proving that demand in the broader service economy remains incredibly sticky.

The CME FedWatch tool indicates that the markets adjusted expectations for a more hawkish stance from the Federal Reserve (Fed). Traders are now pricing in a nearly 86.1% chance of a Fed hike in December, up from 61% before last week’s FOMC meeting.

The Swiss National Bank (SNB) kept its policy rate at 0% for the fourth straight meeting in June, maintaining its current stance, which continues to support both price stability and economic growth. However, the central bank raised its inflation forecast and reaffirmed its readiness to intervene in the foreign exchange markets to curb the Franc’s strength.

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Swiss Franc holds onto losses below 0.8100 amid firm Fed interest rate hike bets

  • The Swiss Franc clings to losses near 0.8088 against the US Dollar amid hawkish Fed bets.
  • The Fed is highly anticipated to deliver at least one interest rate hike this year.
  • Investors await the US S&P Global PMI and Swiss ZEW Survey – Expectations data.

The Swiss Franc (CHF) holds onto Monday’s losses around 0.8088 against the US Dollar (USD) during the Asian trading session on Tuesday. The Swiss Franc pair faces selling pressure due to continued outperformance by the US Dollar amid firm expectations that the Federal Reserve (Fed) will hike interest rates this year.

At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks higher at around 101.05, the highest level seen in over a year.

According to the CME FedWatch tool, the odds of the Fed hiking interest rates this year are almost 87%.

Hawkish Fed bets have been intensified as the Federal Open Market Committee (FOMC) Economic Projections report, released last week, showed that nine out of 19 policymakers have projected an interest rate hike this year. It appears a sharp turnaround as none of the officials favored a hike this year in March’s Economic Projections report.

For more cues on the United States (US) interest rate outlook, investors await the US Personal Consumption Expenditure Price Index (PCE) data for May, which will be released on Thursday.

In Tuesday’s session, investors will focus on the preliminary US S&P Global PMI data for June. The Services PMI is expected to arrive higher at 51.0 from 50.7 in May.

On the Swiss Franc front, investors await the ZEW Survey – Expectations data for June, which will be released on Wednesday.

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Swiss Franc remains subdued nearly seven-month lows

  • 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.

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Chart of the day: GBP/CHF snaps back on retail sales recovery

The British pound is regaining momentum at the end of the week, driven by a stronger-than-expected batch of UK economic data.

This surprise surge in retail sales successfully halted sterling’s broad decline against most G10 currencies. Leading the recovery is the GBP/CHF pair, which broke cleanly above key moving averages to cement the pound’s robust positioning across Europe this Friday.

GBPCHF is exhibiting a bullish outlook, rebounding firmly to 1.0651 after finding support near the 38.2% Fibonacci level. The pair trades cleanly above its 10, 30, and 100-day EMAs, saving the upward trend. With the RSI at 56.7, there is plenty of room for further gains toward recent local highs. Source: xStation5

What’s Driving GBPCHF Today?

  • Sales Surprise on the Upside: Driven by the joint-third warmest May on record and retail promotions, UK retail sales volumes jumped 1.2% in May 2026, bouncing back from a 1.0% decline in April. This growth significantly outperformed economists’ forecasts, with annual sales rising 3.2%. Department and online stores performed particularly well, boosting the online sales share to 28.8%, though overall volumes still remain 0.4% below their pre-pandemic February 2020 levels.
  • Fragile Trend Sustainability: Over the three months to May 2026, sales volumes edged up 0.4%, supported by strong demand for tech products and outdoor items. However, long-term consumer confidence remains fragile. Shoppers are showing caution regarding big-ticket purchases due to cost-of-living pressures and geopolitical uncertainty surrounding the conflict in Iran. Major supermarket groups like Tesco and Morrisons have already noted a distinct slowdown in sales growth since this conflict began.
  • Burnham’s Turning Point: Greater Manchester Mayor Andy Burnham’s decisive parliamentary victory in Makerfield has cleared the way for a potential challenge against the deeply unpopular Prime Minister Keir Starmer, threatening fresh political instability in the UK. Positioned as a prime minister-in-waiting and heavily favored by party members, Burnham’s win severely weakens Starmer—who already faces resignation calls from a quarter of his lawmakers—and sets the stage for a high-stakes battle over the future direction of the Labour government.
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Swiss Franc weakens as traders ‌ramp up US rate hike bets, Vance canceled trip to talks with Iran

  • USD/CHF extends its upside to near 0.8075 in Friday’s early European session. 
  • US Vice President JD Vance pulled out of a planned trip to Switzerland for talks with Iran. 
  • SNB left its key interest rate at 0%, with a focus on currency risks. 

The USD/CHF pair advances to around 0.8075, the highest since December 10, 2025, during the early European session on Friday. The US Dollar (USD) strengthens against the Swiss Franc (CHF) as the Federal Reserve (Fed) officials left interest rates unchanged at its June policy meeting and signaled the possibility of higher rates later this year. 

Hawkish signals from the Fed provide some support to the Greenback. On Wednesday, the US central bank decided to hold its benchmark interest rate steady between 3.50% and 3.75% after Kevin Warsh’s first meeting in charge of the central bank. Warsh said during the press conference that “price stability” would be the Fed’s guiding principle.

Futures traders have priced in that the Fed is likely to raise rates by 25 basis points (bps) at its September meeting, with some chance seen of a move as soon as next month’s meeting. 

On the geopolitical front, US Vice President JD Vance cancelled a planned trip to meet Iranian negotiators in Switzerland to begin complex talks on implementing a 14-point agreement struck between Tehran and Washington to end their war. Traders will closely watch the US-Iran peace deal developments. Uncertainty in the Middle East could underpin the USD against the CHF in the near term. 

The Swiss National Bank (SNB) left its main policy rate unchanged at 0% on Thursday, as widely expected by markets, keeping borrowing costs well below those seen in other major economies. The SNB also said that it is ready to intervene in foreign exchange markets if a rebound in demand for the safe-haven franc drives the currency higher.

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Swiss franc weakens after SNB keeps rates unchanged

The Swiss National Bank (SNB) decided to keep its main interest rate unchanged during its June meeting. The interest rate has remained unchanged exactly since June last year. It is worth emphasizing that interest rate decisions in Switzerland are made quarterly. The interest rate remains at 0% and currently, due to slightly elevated inflation, we should not expect any pressure for cuts, but at the same time, it is still far from the upper limit of the inflation target.

Despite the fact that the war in Iran caused a temporary increase in imported energy prices and pushed the May inflation reading to 0.6%, the Swiss CPI index still sits comfortably in the lower range of the 0-2% inflation target. Switzerland shows significantly less dependence on energy commodities from the Middle East thanks to developed hydropower and nuclear energy, which protects the local economy from global price shocks more strongly than the Eurozone. The main focus for policymakers remains the exchange rate of the Swiss franc and the risk of its excessive appreciation in the face of geopolitical uncertainty.

Macroeconomic forecasts The SNB made a slight upward revision to its inflation forecasts in the short and medium term:

  • Inflation: The Bank now forecasts average inflation at 0.6% in 2026 (up from 0.5% in the March forecast) and 0.6% in 2027 (also up from 0.5%). In 2028, inflation is expected to be 0.7% (compared to 0.6% previously), and a reading of 0.8% is expected in the first quarter of 2029.
  • GDP Growth: Economic forecasts remained unchanged. The SNB expects the Swiss economy to grow by about 1.0% in 2026 and 1.5% in 2027.

Statements from bankers at the SNB conference

Key members of the SNB Governing Board sent clear signals during today’s conference:

  • Martin Schlegel (Chairman of the SNB):”If necessary, we show an increased readiness to intervene in the foreign exchange market. In this way, we counteract a rapid and excessive strengthening of the Swiss franc, which would threaten price stability in Switzerland”.”Inflation has risen in recent months as a result of higher energy prices. However, medium-term inflationary pressure is virtually unchanged compared to the last monetary policy assessment”.”Everything between 0 and 2% is fine regarding inflation” and “no preference as to where in the range inflation is located”.He also indicated that monetary conditions are weaker than in March, and the bank does not currently see second-round effects in Switzerland.
  • “If necessary, we show an increased readiness to intervene in the foreign exchange market. In this way, we counteract a rapid and excessive strengthening of the Swiss franc, which would threaten price stability in Switzerland”.
  • “Inflation has risen in recent months as a result of higher energy prices. However, medium-term inflationary pressure is virtually unchanged compared to the last monetary policy assessment”.
  • “Everything between 0 and 2% is fine regarding inflation” and “no preference as to where in the range inflation is located”.
  • He also indicated that monetary conditions are weaker than in March, and the bank does not currently see second-round effects in Switzerland.
  • Antoine Martin (Member of the SNB Governing Board):He pointed out that the situation in the Middle East remains fragile, adding that global inflation should be expected to remain at an elevated level.
  • He pointed out that the situation in the Middle East remains fragile, adding that global inflation should be expected to remain at an elevated level.
  • Attilio Tschudin (Member of the SNB Governing Board):He noted that domestic indicators show a solid economic recovery, but the main risk for Swiss prospects is the condition of the global economy.
  • He noted that domestic indicators show a solid economic recovery, but the main risk for Swiss prospects is the condition of the global economy.

What to expect for EURCHF and USDCHF? EURCHF

Immediately after the decision was announced, the franc weakened slightly against the euro, falling by 0.2%-0.3% to a level of around 0.9215 per euro. Since the sudden strengthening of the franc at the turn of February and March (outbreak of war in Iran), clear communication from the SNB about its readiness to intervene has systematically pushed the CHF rate down. A strong supply zone for the pair is around 0.9220 to 0.9250.

USDCHF

Wednesday’s signing of a peace agreement in Versailles between the US and Iran by President Trump and the Iranian President is a strong factor mitigating tensions in energy commodity markets. This means a drop in demand for the franc as a “safe haven,” which should favor a rebound and stabilization of EURCHF and USDCHF rates. Nevertheless, due to Martin Schlegel’s declared “increased readiness to intervene” in the event of any turmoil, investors must take into account that the SNB is artificially limiting the franc’s potential for further strengthening. Any sudden attempts at CHF appreciation will likely be met with a decisive sell-off of the currency by the Swiss central bank, which sets a solid long-term floor for EURCHF and USDCHF quotes.

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Swiss Franc strengthens ahead of SNB rate decision

  • USD/CHF weakens to near 0.7985 in Thursday’s early European session. 
  • The Fed voted unanimously to hold its benchmark federal funds rate in a range of 3.5% to 3.75% at its June policy meeting. 
  • The Swiss National Bank is likely to leave its key policy rate unchanged at 0% on Thursday. 

The USD/CHF pair loses momentum to around 0.7985 during the early European session on Thursday. The United States (US) and Iran signed an interim agreement that would end the Iran war, weighing on the US Dollar (USD) against the Swiss Franc (CHF). The Swiss National Bank (SNB) will announce its interest rate decision later on Thursday. 

US President Donald Trump and Iran’s President Masoud Pezeshkian on Wednesday electronically signed a memorandum of understanding to end the US and Israel’s war on Iran. Pakistan’s Prime Minister Shehbaz Sharif said that the agreement is taking “immediate effect” after being signed by both Washington and Tehran. 

Federal Reserve (Fed) officials left interest rates unchanged in the 3.50%-3.75% range at its June policy meeting while signaling the possibility of higher rates later this year as the central bank gauges the inflation effects of the Iran conflict.

Traders have now fully priced in a rate hike in the coming months as the US central bank focuses on price stability over employment. A hawkish tone from the Fed could support the Greenback in the near term. 

The SNB is expected to keep its key policy rate at 0% at the June policy meeting on Thursday and for the rest of the year, according to all the economists who responded to a Reuters poll. 

“With those opposing forces from FX and energy prices at play ‌and Switzerland’s low inflation starting point, we think inflation pressures weigh less on the SNB than on most central banks … Our base case remains the zero‑interest‑rate policy stays in place until end-2027,” said Chiara Angeloni, Europe economist at Bank of America.

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Offshore Yuan Holds Near a Multi-Year High

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.