The Swiss Franc (CHF) reached a fresh 16-month low against the U.S. Dollar (USD), with the USD/CHF currency pair climbing to 0.8367 during Asian trading hours on Thursday. This marks the seventh consecutive day of gains for the pair, driven by sharply weakening investor sentiment towards the Swiss Franc in September. The market is now focused on the upcoming release of Swiss Consumer Price Index (CPI) data later in the day, which could further influence the currency's direction [1].
The Swiss ZEW Survey – Expectations dropped to 2.6, its lowest level in three months, down from 12.1 previously. Despite this decline, analysts cited in the survey maintain a positive outlook on the underlying condition of the Swiss economy, though concerns about inflation have increased [1]. In its third quarterly monetary policy assessment on September 24, 2026, the Swiss National Bank (SNB) kept its policy rate unchanged at 0%. The SNB stated that medium-term inflationary pressure has increased only slightly since June and reaffirmed its readiness to intervene in the foreign exchange market if necessary to maintain appropriate monetary conditions [1].
On the U.S. side, the upside for USD/CHF may be limited as the U.S. Dollar faces headwinds from easing Federal Reserve rate hike expectations. This shift follows softer-than-expected U.S. inflation data, with the August PCE price index rising 0.3% month-over-month (versus a 0.4% forecast) and core PCE increasing 0.2% (below the 0.3% consensus). Annually, headline PCE inflation decelerated to 3.4%, well below the projected 3.7% [1]. As a result, the CME FedWatch Tool now shows markets pricing in a roughly 38% chance of a Fed rate hike in October, down from nearly 51% before the PCE release. Market participants are also awaiting Friday’s U.S. Nonfarm Payrolls report, with consensus forecasts expecting 90,000 jobs added in September and the unemployment rate to remain at 4.1% [1].
Societe Generale’s Jan Groen commented that while August U.S. inflation data appeared benign, the underlying details were less reassuring. He noted that softer core goods inflation masked a reacceleration in core services and super-core inflation, indicating persistent underlying price pressures. Groen concluded that the disinflation trend remains uneven and continues to challenge the Federal Reserve’s efforts to return inflation to target [1].
CONCLUSION
The Swiss Franc's decline to a 16-month low reflects weakening sentiment and anticipation of key inflation data, while the SNB maintains a steady policy stance. Softer U.S. inflation data has tempered Fed rate hike expectations, but underlying price pressures remain a concern. Market participants are closely watching upcoming economic releases for further direction.