USD/CHF drops to mid-0.8100s, back closer to multi-year low on weaker USD

أسواق الإمارات اليومApril 16, 2025

0 5,779 1 minute read

USD/CHF meets with a fresh supply and is pressured by a combination of factors.
US recession fears and Fed rate cut bets weigh on the USD and the currency pair.
The global flight to safety benefits the CHF and contributes to the offered tone.

The USD/CHF pair attracts fresh sellers during the Asian session on Wednesday and erodes a major part of the previous day’s modest recovery gains. Spot prices drop back closer to mid-0.8100s in the last hour and remain well within striking distance of a ten-year low touched last Friday amid a broadly weaker US Dollar (USD).

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, languishes near its lowest level since April 2022 amid the weakening confidence in the US economy. Furthermore, bets that the Federal Reserve (Fed) will resume its rate-cutting cycle soon and lower borrowing costs by 100 basis points in 2025 continue to dent the appeal for the buck. This, in turn, is seen as a key factor exerting downward pressure on the USD/CHF pair.

Meanwhile, the initial market reaction to US President Donald Trump’s decision last week to pause sweeping reciprocal tariffs for 90 days turned out to be short-lived amid concerns over a US recession and the escalating US-China trade war. Moreover, Trump’s rapidly shifting stance on trade tariffs fuels uncertainty and weighs on investors’ sentiment. This benefits the safe-haven Swiss Franc (CHF) and contributes to the offered tone surrounding the USD/CHF pair.

The aforementioned fundamental backdrop suggests that the path of least resistance for spot prices remains to the downside and supports prospects for an extension of a three-month-old downtrend, from the year-to-date high touched in January. Traders, however, might opt to wait for Fed Chair Jerome Powell’s appearance later during the US session for cues about the rate-cut path. In the meantime, the US Retail Sales data might influence the USD and the USD/CHF pair.

Octalas AI