CHF to USD Rate Falls to 0.88 on the Swiss GDP Report for Q2

Over the past two months, the USD/CHF exchange rate has staged a significant recovery, climbing nearly 5.5 cents from below 0.84 in early September. This upward momentum has been fueled by the Eurozone’s economic struggles, highlighted by a contraction in the Services PMI this month.

USD/CHF Chart Weekly – Rejected by the 100 SMA

Such weakness raises concerns about a potential Eurozone recession, which could negatively impact the Swiss economy and prompt the European Central Bank (ECB) to accelerate interest rate cuts. In contrast, the expansion of U.S. services activity has strengthened the USD/CHF , pushing it to its highest levels since July. However, the rally met resistance at the 100-week SMA (green), rejecting the pair and signaling a potential pause in its ascent.

Swiss Franc’s Outlook Amid Eurozone and Domestic Pressures

The Eurozone’s political and economic instability continues to cast a shadow over the Swiss economy, adding to the pressure on the Swiss franc. Market speculation has grown regarding the Swiss National Bank’s (SNB) inclination to lower interest rates further into negative territory if necessary. SNB President Schlegel reinforced this sentiment last week, stating the bank remains open to such measures if economic conditions require them. While the franc briefly dipped earlier in the week, it managed to recover, reflecting resilience despite broader challenges.

The USD/CHF pair has slipped slightly below 0.88 amid a broader retreat in the U.S. dollar, though the market continues to price in a 72% probability of a 25-basis-point rate cut in December. On the Swiss side, expectations of 70 basis points of easing by the end of 2025 add further complexity to the currency’s outlook. With mixed economic signals and potential monetary policy shifts, the CHF remains under close watch as markets assess the next moves by central banks.