USD/CHF Slips Below 1.3700 Amid Israel-Iran Conflict and SNB Rate Cut
By tredu.com • 6/20/2025
Tredu
USD/CHF Drops to 1.3690 on Geopolitical Jitters and Swiss Rate Decision
Key Points:
- USD/CHF falls to 1.3690, breaking its three-day winning streak.
- Swiss Franc gains as safe-haven demand rises amid Israel-Iran conflict.
- Swiss National Bank (SNB) cuts interest rate to 0%, signals flexibility for further easing.
- Markets await the US Philly Fed Manufacturing Index later today.
- Trump to decide on possible US involvement in the conflict within two weeks.
Geopolitical Risk Boosts Swiss Franc
The USD/CHF currency pair moved lower in Friday’s Asian session, falling to 1.3690, as global investors flocked to safe-haven assets amid rising concerns about a deepening conflict in the Middle East.
The Israel-Iran war has now entered its seventh day, and markets remain wary of possible US military involvement, with President Trump expected to make a formal decision within two weeks. This heightened uncertainty drives demand for the Swiss Franc (CHF), a traditional refuge in geopolitical crises.
SNB Slashes Interest Rates to 0%
The Swiss National Bank (SNB) added to CHF strength by cutting its benchmark interest rate by 25 basis points, bringing it down to zero during its June monetary policy meeting. The central bank also hinted it could return to negative rates if necessary.
This unexpected dovish move has led to increased volatility in the USD/CHF pair, although the Franc continues to outperform due to risk-off sentiment.
Market Outlook
Traders now await the US Philly Fed Manufacturing Index, which could provide clues on the US economy’s direction and influence short-term movements in USD pairs.
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