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Swiss franc strengthens as Fed policy uncertainty and Middle East tensions bite
USD/CHF is around 0.8065, while markets give more than a 30% chance of another Fed hike at the next meeting, up from under 20% last week.
USD/CHF extended its slide for a second straight day, trading near 0.8065 and down 0.15% on Thursday as the US dollar weakened after the latest Federal Reserve meeting minutes were released, FXStreet reported.
The minutes highlighted a policy split, with some Fed officials expecting the policy rate to stay near its current 3.6% level through year end, while others argued an additional hike may still be needed. That uncertainty is weighing on the dollar even as US data remains resilient, according to FXStreet.
FXStreet also pointed to labor-market updates from the Department of Labor, showing initial jobless claims fell to 215K for the week ending July 4 from 217K previously, while continuing claims rose slightly to 1.814M.
Geopolitical tensions are limiting dollar losses and adding to inflation risk, FXStreet said, citing renewed US-Iran friction over potential military action and concerns about energy-driven inflation. The Swiss franc, meanwhile, gained safe-haven support, and the Swiss National Bank reiterated it stands ready to intervene if needed to prevent excessive CHF appreciation and curb imported inflation.