USD/CHF Gains Momentum Amid Fed Hawkishness and Swiss Monetary Policy Calm

The U.S. dollar continued its upward drift against the Swiss franc, pushing USD/CHF to a two‑month high on Tuesday, 4 November 2025. The pair rallied to around 0.8100 during the Asian session, extending gains for a fifth consecutive day and setting a new peak since the end of August. At the time of writing, the rate hovered near 0.8085 after briefly testing the psychologically significant 0.8100 level.

Drivers of the Dollar’s Strength

Federal Reserve Outlook

A dominant theme across market commentary is the Federal Reserve’s hawkish stance. Market participants have largely discounted the probability of interest‑rate cuts in the coming months, buoyed by the Fed’s continued focus on tightening policy to curb inflation. This sentiment has reinforced the U.S. dollar, reflected in a higher USD Index (DXY) and a steady demand for USD‑denominated assets.

Swiss National Bank Position

In contrast, Swiss monetary authorities have maintained a dovish outlook. SNB Chair Martin Schlegel signaled confidence that inflationary pressures would accelerate modestly in the near term, and that rates are likely to remain on hold. SNB officials Tschudin and Schlegel echoed this stance, describing current rates as “sufficient” and emphasizing patience. The combination of a less aggressive stance from the SNB and a more hawkish Fed has widened the USD/CHF spread.

Swiss Inflation Data

Swiss inflation data has also played a role. October’s Consumer Price Index fell 0.3 % month‑on‑month, faster than the 0.1 % forecast, and year‑on‑year inflation ticked up only 0.1 %. The sharper‑than‑expected decline in consumer prices has weakened the franc, as markets interpret it as a sign of weaker domestic demand and a lower likelihood of immediate policy tightening by the SNB.

Technical Context

The currency pair is trading near its 52‑week low of 0.7857, underscoring the sustained downward pressure on the franc. The recent surge to 0.8100 marks the highest level since 0.91994 on 12 January 2025, suggesting a significant shift in momentum. The upward trend has been reinforced by a steady flow of USD demand, and the franc has struggled to regain footing even after brief intraday rebounds.

Market Sentiment and Outlook

With the Fed’s hawkish signals and the SNB’s dovish neutrality, the USD/CHF pair is poised to continue its rally, provided the dollar remains resilient and Swiss inflation remains subdued. Traders are watching key economic releases, particularly the next set of U.S. inflation data and any forthcoming commentary from the SNB, for potential turning points.

In summary, the combination of a stronger U.S. dollar, a cautious Swiss monetary stance, and unexpectedly weak Swiss inflation has propelled USD/CHF to a two‑month high, setting the stage for continued volatility in the near term.