USD/CHF exhibits minimal movement as the US Dollar remains stagnant in the face of uncertainty regarding the Federal Reserve’s outlook. The Fed opted to maintain its current interest rates in October, even in the face of persistent inflationary pressures. However, two officials expressed dissent, advocating for an immediate increase in rates. Swiss ZEW Expectations fell to -15.3 in October, representing the most significant monthly drop in economic sentiment since March 2026. USD/CHF maintains its gains after reducing daily increases, trading near 0.8280 during the Asian session on Thursday. The US Dollar lost recent gains following the Federal Reserve’s decision to maintain interest rates at their current level, a move that was anticipated by market participants, yet it offered little insight into the future direction of monetary policy.
The Fed maintained rates at 3.75%-4.00% and observed that economic activity remains on an upward trajectory. In its official statement, the central bank underscored the resilience of domestic spending, the strength of capital investment, and the vigour of productivity growth. Concerning its labour market mandate, the Fed noted that job gains have aligned with workforce growth, while the unemployment rate has remained relatively stable. On inflation, the Fed recognised that price pressures continue to be high, yet it opted to halt further rate increases in order to collect more data and evaluate the suitable monetary policy approach moving ahead. The decision was not unanimous: Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, voting instead in favour of an immediate rate increase.
Fed Chair Kevin Warsh reaffirmed the Federal Open Market Committee’s commitment to delivering price stability and achieving its 2% inflation target, emphasising that the underlying economy remains robust. He also outlined the central bank’s upcoming schedule, noting that the Fed will hold eight meetings next year-including one without a formal vote-and that he anticipates six policy-setting meetings in 2028. On Wednesday, Switzerland’s ZEW Survey – Expectations index experienced a significant decline, falling to -15.3 in October from +2.6 in September. This decline represents the sharpest monthly drop in sentiment since March 2026, when confidence was heavily impacted by Middle East tensions. Strategists note that their 1-3 week view on USD/CHF has shifted as price action has evolved over recent sessions. They recall that “two days ago (26 Oct, spot at 0.8250), we indicated that USD ‘has likely entered a range-trading phase between 0.8200 and 0.8290.’”
However, after the Dollar pushed up to 0.8278, UOB highlighted on 27 October, with spot at 0.8270, that “upward momentum is starting to build, and if USD closes above 0.8290, it could rise to 0.8320.” At the same time, they cautioned that “to sustain the momentum buildup, USD must not break below 0.8230 (‘strong support’ level).” Following this guidance, USD/CHF subsequently “rose and closed at 0.8290.” UOB concedes that “while we would have preferred a more decisive close above 0.8290, the price action suggests USD could test 0.8320.” Even so, they judge that “at this stage, the odds of a continued rise above this level are not high for now,” and revise their technical levels accordingly, with “the ‘strong support’ level now at 0.8250 instead of 0.8230.”
