The Swiss Franc remained steady against the US Dollar on Thursday, with USD/CHF trading around 0.8354 after reaching an intraday high of 0.8382. This stability was attributed to stronger Swiss inflation data, which provided some support to the Franc, even as the US Dollar maintained strength near levels last seen in May 2025 due to robust US economic indicators and elevated Treasury yields [1].
The US Dollar Index hovered around 101.75 after touching a fresh yearly high of 101.99, bolstered by the benchmark 10-year US Treasury yield holding at 5.32% after reaching 5.34%, its highest since 2002. The US labor market showed resilience, with Initial Jobless Claims falling to 197K for the week ending September 26, below expectations of 200K and the previous reading of 198K. The four-week moving average also declined to 200K from 202.5K. Additionally, the ADP report indicated private-sector employment increased by 90K in September, surpassing the 70K forecast and accelerating from 36K in August. US GDP for the second quarter was revised higher to an annualized rate of 2.2% from 1.5% [1].
Despite these positive data points, softer-than-expected US Personal Consumption Expenditures (PCE) inflation data released on Wednesday led markets to scale back expectations for a Federal Reserve rate hike in October. Core PCE inflation rose 0.2% month-over-month in August, below the 0.3% forecast, while the annual rate remained unchanged at 3.0%, under the expected 3.3%. The CME FedWatch Tool now shows a 36% probability of a rate hike at the October 27-28 meeting, down from 70% earlier in the week. Nonetheless, Fed officials remain concerned about inflation running above the 2% target, with high energy prices cited as a significant challenge [1].
On the Swiss side, annual inflation accelerated to 1.0% in September from 0.8% in August, matching market expectations. Consumer prices were unchanged on a monthly basis after a 0.4% rise previously. This uptick in inflation offered some support to the Swiss Franc, though it was not enough to drive significant appreciation against the US Dollar [1].
CONCLUSION
The Swiss Franc found some support from rising domestic inflation, but the US Dollar's strength, driven by robust economic data and high Treasury yields, kept USD/CHF near recent highs. Market expectations for a near-term Fed rate hike have diminished following softer US inflation data, though concerns about persistent inflation remain. Overall, the market impact is moderate, with both currencies influenced by their respective inflation and monetary policy outlooks.