SNB holds at zero, Fed rate bets and safe-haven flows drive USD/CHF
SNB holds rates at zero, ready to weaken franc The Swiss National Bank kept its key rate at zero and said it is increasingly willing to step into currency markets to stop the franc from getting too strong. That caps the franc and supports USD/CHF, because a central bank that fights franc strength makes holding francs less rewarding.
This is the main policy force keeping a floor under USD/CHF.
Fed rate-hike expectations and safe-haven dollar demand Renewed US-Iran tensions and rising oil prices boosted the safe-haven dollar, while Fed minutes showed some officials open to a rate hike and markets priced a 62% chance of a September increase. Higher expected US rates pull money into dollars, lifting USD/CHF.
This explains the dollar side of the pair and the recent push higher.
Weak US jobs and inflation data weigh on the dollar A weak US Nonfarm Payrolls report and slower June Producer Price Index growth, plus dovish comments from Fed officials, pushed the dollar down and USD/CHF to around 0.8034. Softer US data reduce the chance of Fed rate hikes, which weakens the dollar against the franc.
This is the main counterweight pulling USD/CHF lower.
AI-driven hedging flows support the franc Bank of America says currency hedging tied to the AI stock boom is now a bigger FX driver than usual fundamentals, and these flows have generally supported the Swiss franc while putting modest selling pressure on the dollar. That works against USD/CHF.
It is a structural flow that adds to franc strength, a real counterweight.