Photo by Claudio Schwarz on Unsplash
 

• USD/CHF rises as the Swiss Franc weakens after the SNB’s expected 25 basis point rate cut on Thursday.
• The SNB avoided signaling a clear policy path, emphasizing the need for lower borrowing costs to maintain appropriate monetary conditions.
• The US Dollar stays strong amid growing risk aversion driven by escalating global trade tensions related to US tariff policies.

USD/CHF continues its upward momentum for the third consecutive session, trading around 0.8840 during Asian hours on Friday. The pair gains as the Swiss Franc (CHF) struggles following the Swiss National Bank’s (SNB) widely expected decision to cut its interest rate by 25 basis points (bps) to 0.25% from 0.50% after its March quarter monetary policy review.

Despite the rate cut, the SNB refrained from committing to a specific policy direction, stating that lower borrowing costs are necessary to align monetary conditions with subdued inflationary pressures.

However, the downside for the USD/CHF pair may be limited, as the Swiss Franc finds support from safe-haven demand amid rising geopolitical risks, stable Swiss inflation, and uncertainty surrounding US economic policy.

Additionally, the US Dollar (USD) could remain firm as risk aversion rises due to escalating global trade tensions linked to US tariff policies. Federal Reserve (Fed) Chair Jerome Powell downplayed the inflationary effects of tariffs, calling them temporary but acknowledged the broader economic uncertainty they introduce.

On the economic data front, US Initial Jobless Claims rose to 223K for the week ending March 15, slightly below the 224K estimate but surpassing the previous week’s revised figure of 221K. Meanwhile, the Philadelphia Fed Manufacturing Survey for March fell to 12.5 from February’s 18.1, marking a second consecutive monthly decline but remaining above the expected 8.5.

More By This Author: