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USD/CHF holds near 0.8285 as Fed-SNB rate gap widens
FXStreet says the SNB kept its 0% policy rate unchanged on Thursday, while the Fed lifted rates 25 basis points last week to 3.75% to 4.00%, supporting the US dollar.
USD/CHF held firm on Friday despite a slight pullback in the US dollar after a strong weekly rally, according to FXStreet. The pair was hovering around 0.8285, near levels last seen in May 2025, and was on track for a fourth consecutive weekly gain.
FXStreet attributed the Swiss franc's underperformance to a widening interest rate gap, pointing to the hawkish Fed outlook that has supported the dollar. The article also said Switzerland's SNB maintains a 0% policy rate, which increases the franc's appeal as a funding currency for carry trades, adding to selling pressure on the currency.
FXStreet reported that at its monetary policy assessment on Thursday, the SNB left its policy rate unchanged and said its current stance was appropriate to keep inflation within a range consistent with price stability while supporting economic development. It noted the SNB acknowledged inflation had risen due to higher oil prices, that medium term inflationary pressure increased only slightly, and that the bank raised its inflation forecast.
The article contrasted this with the Fed's decision to raise interest rates by 25 basis points last week, bringing the federal funds rate to 3.75% to 4.00%. FXStreet said this Fed move has reinforced support for the dollar versus the franc.