CHF to USD Rate Holds in 1-Cent Range After Slowdown in Swiss Inflation

The CHF to USD exchange rate has remained within a narrow 1-cent range recently, as markets react to shifting risk sentiment. Positive factors, such as China’s economic stimulus measures and dovish monetary policies from both the Federal Reserve and the Swiss National Bank (SNB), have helped bolster risk appetite. However, elevated tensions in the Middle East and weak economic data have tempered this optimism, keeping traders cautious.

As a result, the USD/CHF pair has been oscillating between 0.84 and 0.85, with market participants trying to assess which central bank’s dovish policies will have a greater influence on the currency. Recently, the SNB implemented its third consecutive 25 basis point rate cut, while the Federal Reserve lowered rates by 50 basis points as part of its ongoing quantitative easing efforts.

USD/CHF Chart Daily – Stuck Below the 20 SMA and the 0.84 Support

Although these actions were anticipated, the initial reaction saw USD/CHF fall by 50 pips, briefly touching the 0.84 support level before recovering. Market sentiment now suggests that the Fed is more likely to opt for a smaller, 25 basis point rate cut in November rather than another 50 basis point reduction. Inflation trends also play a role in the outlook. While inflation in the U.S. has decreased, it remains higher than in Switzerland, as evidenced by recent CPI reports. Today, Switzerland released its September CPI data, providing additional insight into the inflationary landscape and its potential impact on the CHF-USD exchange rate.

Swiss CPI Inflation Report for September

• Monthly CPI (MoM): -0.3% vs -0.1% expected (previous: 0.0%)
• Yearly CPI (YoY): 0.8% vs 1.1% expected (previous: 1.1%)

This data indicates a sharper decline in prices than anticipated, signaling weaker inflationary pressure in Switzerland. These lower-than-expected inflation numbers may prompt further dovish signals from the Swiss National Bank (SNB), which could influence future monetary policy decisions.

USD/CHF Live Chart