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Swiss franc weakens versus US dollar on hawkish Fed expectations

USD/CHF was up about 0.15% near 0.8082, while the US Dollar Index also edged lower as traders weighed a high chance of a September Fed rate hike.

Reported · Written up by our desk · Major Pairs

The Swiss franc fell against several major currencies at the start of the week, with USD/CHF rising 0.15% to around 0.8082, according to FXStreet. The move reflects a pickup in market sentiment after a ceasefire announcement in the Middle East reduced demand for safe havens.

FXStreet also tied the dollar’s relative strength versus the franc to expectations that the Federal Reserve will raise interest rates in the near term. The US Dollar Index, which tracks the greenback versus six major currencies, was down about 0.1% near 99.70, but it was higher against the Swiss franc.

FXStreet cited TD Securities commentary that underlying strength in US activity is increasingly challenging the view that current Fed policy is very restrictive, while warning that inflation dynamics remain key. The outlet noted TD Securities’ point that sticky core services inflation could still be enough to motivate additional Fed tightening.

The CME FedWatch tool cited by FXStreet showed a 64.6% chance of a Fed rate increase at the September meeting. Investors are also set to focus on upcoming US data, including July Nonfarm Payrolls released on Friday.

Latest closeDollar index 99.80 ▼0.2%

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