Current Dynamics in the USD/CHF Pair

The US dollar remains under pressure against the Swiss franc, with the pair hovering around 0.7656 as of the latest trading session. After a brief rebound on the previous day, the dollar has slipped back below its previous close of 0.7697, while the euro has also weakened, trading at 1.1985 versus 1.1942. The franc, meanwhile, has edged higher against the euro, reflecting its status as a classic safe‑haven currency.

Factors Driving the Decline

  1. Fed Policy Outlook Market participants are closely monitoring the Federal Reserve’s upcoming policy decision on Wednesday. Speculation that the Fed may keep interest rates unchanged or adopt a more dovish stance has weighed on the dollar. This sentiment is echoed in reports noting a rebound in the USD/CHF to near 0.7700 before falling back to the 0.7600 level, highlighting the volatility surrounding Fed announcements.

  2. Trade and Political Uncertainty Recent reports of US trade policy uncertainty and potential tariff escalations have added to the dollar’s weakness. Additionally, fears of a federal shutdown have dampened bullish sentiment, limiting upside potential for the pair even as the dollar recovers briefly in European trading hours.

  3. Safe‑Haven Flows into the Franc The Swiss franc has experienced a remarkable rally in January 2026, gaining 3.5% against the dollar alone in the month, and has reached its highest level in eleven years at 0.7667 on 28 January. This surge is attributed to the franc’s role as a safe‑haven amid global market turbulence, including concerns over the US dollar’s stability and geopolitical tensions.

  4. Broader Dollar Weakness The dollar has hit a low not seen since August 2011, falling more than 1% against the franc. Broad-based selling pressure has emerged as investors seek refuge in the CHF, which has benefited from its perceived safety in times of uncertainty.

Recent Price Movements

  • 27 January: The pair fell to a 2011 low, trading around 0.7666 as the dollar weakened.
  • 28 January: A slight rebound pushed the USD/CHF to near 0.7700, but the pair struggled to maintain levels above 0.7750.
  • 29 January: Overnight selling pushed the dollar back to 0.7656, with the euro/dollar pair also easing.

Outlook

The USD/CHF is likely to remain volatile in the coming days. While the franc’s safe‑haven status supports its strength, the dollar’s recovery will hinge on the Fed’s policy decision and any resolution of the pending federal shutdown. Traders should monitor the upcoming interest‑rate announcement closely, as any dovish indication could further depress the dollar and lift the franc. Conversely, a hawkish stance or decisive action on the shutdown could provide a brief rally for the dollar, tightening the pair toward its 52‑week low of 0.7629.