The USD/CHF pair is seeing a slight uptick on Wednesday, breaking a streak of four days in the red. This change coincides with ongoing demand for the US Dollar, which has gained traction following the Federal Reserve’s recent rate hike during its meeting on September 15-16. As of now, the currency pair is trading around 0.8234, not too far from the peak of 0.8263 reached last week, which was a high not seen in over a year.
The Fed opted to increase rates by 25 basis points, marking its first increase in three years. This move was made in response to persistent inflation and soaring energy costs influenced by the geopolitical situation in the Middle East. The central bank indicated that this decision was aimed at steering inflation back toward its goal of 2% more quickly. In the updated forecasts, the median interest rate estimations for both 2026 and 2027 have been set at 4.1%, suggesting that another rate hike might be on the table for this year, with no cuts anticipated next year.
Comments from Fed officials have continued to reflect a hawkish stance. For instance, on Tuesday, Richmond Fed President Tom Barkin mentioned that the economy appears to be strengthening, urging caution as inflationary pressures are not restricted to energy and tariff spikes. Similarly, Boston Fed President Susan Collins emphasized that a more restrictive federal funds rate could aid in ensuring that inflation reliably returns to target levels.
The anticipation of further tightening from the Fed comes as inflation risks remain high largely due to the energy crisis linked to the conflict in the Middle East. During the United Nations General Assembly in New York, President Donald Trump noted that progress has been made in talks between the US and Iran, describing the negotiations as productive, although no agreement has been reached concerning the reopening of the Strait of Hormuz.
On the Swiss side, the Swiss National Bank (SNB) maintains a 0% policy rate, which results in a yield disadvantage for the Swiss Franc (CHF) compared to the US Dollar. The SNB’s next policy announcement is expected on Thursday, with market sentiment leaning toward the belief that interest rates will remain steady.
Economists from DBS Group Research predict that while the SNB is likely to keep its policy rate unchanged, it may raise its near-term inflation outlook as the impact of higher energy prices starts to affect the economy amidst ongoing uncertainties in the Middle East. They also note that the SNB may take a more careful look at second-round inflation effects, as highlighted in its June meeting minutes, especially in areas like processed foods, transport, tourism, and restaurants, to gauge the extent of price pressures.
According to DBS, the degree of hawkishness linked to any upcoming forecast revision will depend not just on immediate inflation figures, but also on whether the SNB perceives that the oil price surge is influencing underlying inflation rates. The policy implications will hinge on how deeply these cost hikes permeate through the wider economy. Moreover, DBS argues that the SNB should consider the rate hikes from both the Fed and ECB as a significant counterbalance to the demand for the CHF, which might alleviate some pressure on the Franc, despite the reassessment of domestic inflation risks.
US Dollar Price Today
The following table outlines the percentage change of the US Dollar (USD) against several major currencies today; notably, it has performed strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.32% | 0.48% | 0.30% | 0.18% | 0.78% | 0.65% | 0.24% | |
| EUR | -0.32% | 0.15% | -0.02% | -0.13% | 0.45% | 0.31% | -0.08% | |
| GBP | -0.48% | -0.15% | -0.17% | -0.29% | 0.30% | 0.17% | -0.17% | |
| JPY | -0.30% | 0.02% | 0.17% | -0.11% | 0.45% | 0.35% | -0.00% | |
| CAD | -0.18% | 0.13% | 0.29% | 0.11% | 0.57% | 0.47% | 0.11% | |
| AUD | -0.78% | -0.45% | -0.30% | -0.45% | -0.57% | -0.12% | -0.46% | |
| NZD | -0.65% | -0.31% | -0.17% | -0.35% | -0.47% | 0.12% | -0.34% | |
| CHF | -0.24% | 0.08% | 0.17% | 0.00% | -0.11% | 0.46% | 0.34% |
This heatmap depicts the percentage changes between major currencies. The base currency is selected from the left column, while the quote currency is chosen from the top row. For instance, by selecting the US Dollar from the left and moving to the Japanese Yen horizontally, the displayed percentage change represents USD (base)/JPY (quote).
