The Swiss Franc declined against the US Dollar, with USD/CHF rising nearly 0.30% to trade around 0.8100 during Asian hours on Friday, as the US Dollar found support from increasing expectations of a Federal Reserve rate hike. According to the CME FedWatch tool, markets have priced in a 63.4% probability that the Fed will raise interest rates at its September 15–16 meeting, driven by accelerating inflation data in the United States [1].
The headline Personal Consumption Expenditures (PCE) Price Index in the US climbed to 4.1% year-over-year in May, up from 3.3% in April, marking the first time in three years the figure has breached 4.0%. This surge is largely attributed to rising energy prices stemming from the Middle East conflict. The core PCE index, the Fed’s preferred inflation gauge, also rose to 3.4% year-over-year from 3.3%, representing the highest annual core reading since October 2023 [1].
In Switzerland, investor sentiment worsened significantly in June 2026, with the economic expectations index dropping to -25.0 from -11.1 in May, a sharp month-on-month decline of 13.9 points according to the latest UBS & CFA Society Switzerland survey. The Swiss National Bank (SNB) kept its benchmark policy rate unchanged at 0% for the fourth consecutive meeting, reiterating that its current stance supports economic growth and price stability. However, the SNB raised its inflation forecasts and emphasized its readiness to intervene in foreign exchange markets if necessary [1].
The combination of hawkish Fed expectations and a dovish SNB stance, alongside worsening Swiss investor sentiment, has contributed to the Swiss Franc's decline against the US Dollar. The SNB’s willingness to intervene in currency markets remains a potential factor for future moves, but for now, the market is focused on the diverging monetary policy outlooks between the US and Switzerland [1].
CONCLUSION
The Swiss Franc's decline is driven by rising US rate hike expectations and worsening Swiss investor sentiment, while the SNB maintains a steady policy stance. Market participants are closely watching inflation data and central bank actions, with the US Dollar currently favored amid the prospect of higher US rates.