The Swiss Franc (CHF) continued its decline against the US Dollar (USD) for the fifth consecutive trading day, falling by 0.15% on Tuesday, with the USD/CHF pair trading at 0.8100 at the time of writing [1]. This depreciation follows a nearly 2% drop in the Swiss Franc versus the Greenback since June 18, attributed to a sudden shift in policy stance by nearly half of the FOMC board and growing expectations that the Federal Reserve could raise rates later this year [1].
The Swiss National Bank (SNB) kept its policy rate unchanged at 0% last week, but Chairman Martin Schlegel expressed concerns about the Franc’s rapid and excessive appreciation, particularly amid ongoing uncertainty in the Middle East. Schlegel stated that the SNB is prepared to intervene in the foreign exchange markets if necessary [1].
On the technical front, the USD/CHF pair maintains an upward bias, having reached the 0.8042 target from a head-and-shoulders pattern and now approaching the 0.8100 level. A break above this could lead to further gains toward the August 1, 2025, high at 0.8172 and potentially the 0.8200 mark [1].
In contrast, the Swiss Franc strengthened against the Euro, with the EUR/CHF pair dropping below the 200-day simple moving average at 0.9227, opening the possibility of a retest of the 0.9200 level. While momentum remains bullish, buyers need to surpass the recent cycle high at 0.9266 (June 22) to challenge the 0.9300 mark. If EUR/CHF falls below 0.9200, further losses could target the 0.9180 level, the June 17 daily low [1].
US economic data indicated robust activity in both manufacturing and services sectors, driven by companies front-loading orders to avoid inventory shortages and rising prices. Meanwhile, European economic activity remains in contractionary territory, despite some improvement, with the S&P Services PMI rising from 47.7 to 48.9 but still below the expansion threshold for the second consecutive month [1].
CONCLUSION
The Swiss Franc's mixed performance reflects diverging monetary policy expectations and economic conditions in the US and Europe. With the SNB signaling readiness to intervene and the Fed potentially raising rates, currency volatility may persist. Market participants should monitor central bank actions and key technical levels for further direction.