The Fed's rate cut expectations and the Swiss National Bank's hawkish stance have combined to push the USD/CHF into a 14-year low.
2025-07-02 13:41:31
USD/CHF remained in a narrow range during the Asian session on Wednesday, trading above the 0.7900 mark. After the currency pair hit a near 14-year low in the previous trading day, market sentiment remained cautious as the market awaited the upcoming US employment data for new momentum.
The US dollar rebounded slightly, but the overall rebound momentum was limited. The US dollar index rebounded modestly from a three-and-a-half-year low, but the market generally expected the Federal Reserve to restart the interest rate cut cycle in the second half of the year, limiting the dollar's rise. At the same time, concerns about the US fiscal deficit and debt ceiling also dragged down the dollar's popularity.
The Swiss National Bank's unexpectedly hawkish stance has added to the strength of the Swiss franc. The market originally expected that the Swiss National Bank might adjust interest rates to negative values again this year, but the bank's recent remarks broke expectations and strengthened the market's confidence in its ability to maintain a tight policy. The Swiss franc's appeal as a safe-haven currency remains strong amid the recovery in risk appetite.
Market analysis pointed out: "The divergence in monetary policies between the Federal Reserve and the Swiss National Bank has kept the downward pressure on the USD/CHF pair, and it has not escaped from the weak structure technically."
From a technical perspective, the USD/CHF daily chart shows that the weak consolidation pattern continues. The currency pair is currently at a low level since 2011, and the MACD indicator continues to run below the zero axis, suggesting that the bears are still dominant.
The short-term support is at 0.7875. If it falls below this level, it may further test the 0.7800 integer level; the upper resistance level is focused on the 0.7960 to 0.8000 area, and the rebound momentum is still insufficient.
The upcoming ADP private sector employment report, as well as the non-farm payrolls (NFP) data, will provide key guidance to the market, especially against the backdrop of unclear interest rate policy expectations.
Editor's comments:
Currently, the USD/CHF pair is caught in a dilemma of "structural narrowing of interest rate differentials". Especially when the Swiss National Bank sends hawkish signals and the Federal Reserve is expected to cut interest rates, it is difficult for the USD to maintain its medium-term strength.
If the US employment data continues to weaken, it is possible that USD/CHF will hit a new low, or even test the level below 0.7800. From a risk management perspective, in the short term, attention should be paid to whether the 0.7875 support level is breached, while in the medium term, attention can continue to be paid to the trend opportunities brought about by the policy differences between the two countries.
The US dollar rebounded slightly, but the overall rebound momentum was limited. The US dollar index rebounded modestly from a three-and-a-half-year low, but the market generally expected the Federal Reserve to restart the interest rate cut cycle in the second half of the year, limiting the dollar's rise. At the same time, concerns about the US fiscal deficit and debt ceiling also dragged down the dollar's popularity.
The Swiss National Bank's unexpectedly hawkish stance has added to the strength of the Swiss franc. The market originally expected that the Swiss National Bank might adjust interest rates to negative values again this year, but the bank's recent remarks broke expectations and strengthened the market's confidence in its ability to maintain a tight policy. The Swiss franc's appeal as a safe-haven currency remains strong amid the recovery in risk appetite.
Market analysis pointed out: "The divergence in monetary policies between the Federal Reserve and the Swiss National Bank has kept the downward pressure on the USD/CHF pair, and it has not escaped from the weak structure technically."
From a technical perspective, the USD/CHF daily chart shows that the weak consolidation pattern continues. The currency pair is currently at a low level since 2011, and the MACD indicator continues to run below the zero axis, suggesting that the bears are still dominant.
The short-term support is at 0.7875. If it falls below this level, it may further test the 0.7800 integer level; the upper resistance level is focused on the 0.7960 to 0.8000 area, and the rebound momentum is still insufficient.
The upcoming ADP private sector employment report, as well as the non-farm payrolls (NFP) data, will provide key guidance to the market, especially against the backdrop of unclear interest rate policy expectations.
Editor's comments:
Currently, the USD/CHF pair is caught in a dilemma of "structural narrowing of interest rate differentials". Especially when the Swiss National Bank sends hawkish signals and the Federal Reserve is expected to cut interest rates, it is difficult for the USD to maintain its medium-term strength.
If the US employment data continues to weaken, it is possible that USD/CHF will hit a new low, or even test the level below 0.7800. From a risk management perspective, in the short term, attention should be paid to whether the 0.7875 support level is breached, while in the medium term, attention can continue to be paid to the trend opportunities brought about by the policy differences between the two countries.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
