USD/CHF Steadies Near 0.8250 After SNB Warns on Strong Franc, Low Inflation

USD/CHF Stabilizes Around 0.8250 Following SNB Chairman's Warning of a Strong Swiss Franc and Low Inflation

The USD/CHF currency pair is trading steadily on Wednesday, holding just below 0.8280 after posting a strong near-1% rally on Tuesday, driven by a broadly firmer US Dollar. As of the European session, the pair is hovering around 0.8275, slightly lower from intraday highs but still comfortably above the key 0.8250 psychological support level.

The rally in the US Dollar was largely supported by strong US Consumer Confidence data and anticipation ahead of the Federal Reserve’s FOMC minutes, scheduled for release later today. The US Dollar Index (DXY), which measures the currency against a basket of six major peers, remains firm near 99.60, reflecting ongoing bullish sentiment around the Greenback.

Meanwhile, Swiss National Bank (SNB) Chairman Thomas Jordan warned that negative inflation could not be ruled out, although he emphasized that medium-term price stability remains the SNB’s core mandate. His comments highlight the challenges facing the central bank as the Swiss Franc remains elevated amid persistent global demand for safe-haven assets.

The combination of subdued inflation in Switzerland and global risk aversion continues to support CHF, but the SNB’s concern over currency strength may limit further appreciation. On the other hand, the USD is buoyed by expectations that the Fed will maintain a hawkish tone due to resilient economic data, potentially keeping the USD/CHF pair supported in the near term.

Ongoing geopolitical tensions, particularly the unresolved Russia-Ukraine crisis, and uncertainties around global trade policies continue to fuel demand for both the US Dollar and the Swiss Franc, complicating the near-term outlook for the pair.