- USD/CHF attracts some dip-buyers and draws support from a combination of factors.
- The CHF drifts lower after the SNB’s expected 25 bps rate cut and acts as a tailwind.
- A modest USD uptick provides an additional boost, though the upside seems limited.
The USD/CHF pair reverses an intraday dip to the 0.8755 area or a one-week low touched during the early European session on Thursday and spikes to a fresh daily high in reaction to the Swiss National Bank (SNB) policy decision. Spot prices climb back above the 0.8800 mark in the last hour, though bulls might wait for a sustained move beyond a technically significant 200-day Simple Moving Average (SMA) before placing fresh bets.
The Swiss Franc (CHF) weakens across the board after the SNB, as was expected, lowered the benchmark Sight Deposit Rate by 25 basis points (bps) to 0.25% from 0.50% at the end of its monetary policy assessment for the March quarter. Furthermore, the central bank said that it will continue to monitor the situation closely and adjust its monetary policy if necessary amid the low inflationary pressure and the heightened downside risks to inflation. Apart from this, a generally positive risk tone undermines the safe-haven CHF, which, along with a modest US Dollar (USD) uptick, acts as a tailwind for the USD/CHF pair.
The Federal Reserve (Fed) decided to keep interest rates unchanged at the end of a two-day policy meeting on Wednesday and maintain its forecast for only two 25 bps rate cuts by the end of this year. Moreover, the Fed gave a bump higher to its inflation projection, which, in turn, is seen as a key factor lending some support to the buck. Any meaningful USD appreciation, however, seems elusive amid the growing market acceptance that the US central bank would resume its rate-cutting cycle sooner than expected amid the uncertainty about the impact of US President Donald Trump's tariffs on US economic activity.
Furthermore, persistent geopolitical risks stemming from the ongoing conflict in the Middle East should offer some support to the CHF and contribute to capping the USD/CHF pair. Hence, it will be prudent to wait for strong follow-through buying before confirming that spot prices have formed a near-term bottom and positioning for any meaningful recovery from the year-to-date low, around the 0.8760-0.8755 region touched on March 10. Traders now look forward to the US economic docket – featuring Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and Existing Home Sales – for some impetus.
Economic Indicator
SNB Interest Rate Decision
The Swiss National Bank (SNB) announces its interest rate decision after each of the Bank’s four scheduled annual meetings, one per quarter. Generally, if the SNB is hawkish about the inflation outlook of the economy and raises interest rates, it is bullish for the Swiss Franc (CHF). Likewise, if the SNB has a dovish view on the economy and keeps interest rates unchanged, or cuts them, it is usually bearish for CHF.
Read more.Last release: Thu Mar 20, 2025 08:30
Frequency: Irregular
Actual: 0.25%
Consensus: 0.25%
Previous: 0.5%
Source: Swiss National Bank
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD remains offered and challenges 1.0800
The intense recovery in the US Dollar keeps the price action in the risk complex depressed, forcing EUR/USD to recede further and put the key support at 1.0800 to the test on Friday.
GBP/USD breaks below 1.2900 on stronger Dollar
Persistent buying pressure on the Greenback has pushed GBP/USD to multi-day lows below the 1.2900 level, as investors continue to digest the recent interest rate decisions from both the Fed and the BoE.
Gold meets support around the $3,000 mark
The combined impact of a stronger US Dollar, continued profit taking, and the effects of Quadruple Witching weighed on Gold, pulling its troy ounce price down to around the pivotal $3,000 level on Friday.
US SEC Crypto Task Force to host the first-ever roundtable on crypto asset regulation
The US Securities and Exchange Commission (SEC) Crypto Task Force will host a series of roundtables to discuss key areas of interest in regulating crypto assets. The “Spring Sprint Toward Crypto Clarity” series’ first-ever roundtable begins on Friday.
Week ahead – Flash PMIs, US and UK inflation eyed as tariff war rumbles on
US PCE inflation up next, but will consumption data matter more? UK budget and CPI in focus after hawkish BoE decision. Euro turns to flash PMIs for bounce as rally runs out of steam. Inflation numbers out of Tokyo and Australia also on the agenda.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.