The Swiss Franc (CHF) weakened against both the US Dollar (USD) and the Euro (EUR) on Monday, driven by improved risk appetite in global markets and policy signals from central banks. The start of US-Iran talks, described as positive by US Vice President JD Vance, contributed to the risk-on sentiment, while a hawkish tilt from the Federal Reserve (Fed) and the Swiss National Bank's (SNB) readiness to weaken the Franc kept the currency under pressure throughout the day [1].
On June 17, the Federal Reserve held its latest monetary policy meeting, opting to keep interest rates unchanged. However, nearly half of Fed members indicated a preference for further tightening, citing a rise in energy prices linked to the Middle East conflict, which pushed US inflation above the 3% threshold. The newly appointed Fed Chair, Kevin Warsh, reaffirmed the central bank's commitment to price stability, which supported the USD/CHF pair [1].
The SNB, in a decision made last week, maintained its policy rate at 0% and signaled its willingness to intervene in foreign exchange markets to counteract any 'rapid and excessive appreciation' of the Franc. This stance is aimed at preventing Swiss exports from becoming too expensive in foreign currencies, which could hurt the Swiss economy [1].
Technical analysis shows that USD/CHF remains upward-biased, having reached the inverted head-and-shoulders pattern objective of 0.8042 and ending the day near 0.8090. A move above 0.8100 could expose the August 1, 2025, high at 0.8172 and then 0.8200. Similarly, EUR/CHF is bullish after surpassing the 200-day Simple Moving Average at 0.9223, with potential upside to two-month highs at 0.9266, the January 21 swing high of 0.9307, and the year-to-date high of 0.9349 [1].
CONCLUSION
The Swiss Franc's decline against the Dollar and Euro reflects a combination of improved global risk sentiment and central bank policy signals. The SNB's readiness to intervene and the Fed's hawkish stance have contributed to the currency's weakness, with technical indicators suggesting further upside for USD/CHF and EUR/CHF. Market participants are likely to monitor central bank actions and geopolitical developments for further direction.