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Swiss franc strengthens as dollar weakens on cooler Fed hike odds
CME FedWatch shows traders pricing a 35% chance of a Fed rate hike in September, down from 47% a month earlier.
USD/CHF pulled back for the dollar after fading expectations for a US rate hike, with the pair last seen trading around 0.8120 during Wednesday’s Asian session, according to FXStreet.
FXStreet links the move to a weaker US data backdrop, including July retail sales falling for the first time in nine months, alongside concern after unexpected job losses and tame CPI inflation. The Fed left rates unchanged at its last meeting, but three officials dissented in favor of a hike, raising attention on upcoming minutes for more detail on internal division.
FXStreet also cites the shift in market pricing, noting that CME FedWatch has reduced the odds of a September hike to 35% from 47% a month earlier. Against that backdrop, Switzerland’s growth excluding major sporting events accelerated to 1.5% quarter-on-quarter in the second quarter of 2026, and Swiss inflation eased to 0.4% in July, its lowest level in four months.
On the policy front, FXStreet says the Swiss National Bank kept its policy rate at 0% and is expected to hold through 2027, with further cuts treated as a contingency. FXStreet adds that foreign exchange interventions have helped protect Swiss exporters by limiting safe-haven capital inflows into the franc, and Rabobank said ongoing haven-flow pressure has long challenged the SNB.