Swiss Franc gains as US Dollar loses post-Jackson Hole momentum
USD/CHF trades with a downside bias on Monday as the US Dollar (USD) struggles to gain traction despite rising Federal Reserve (Fed) interest rate hike expectations and Middle East tensions. At the time of writing, the pair trades around 0.8080, down roughly 0.15% on the day.
The Swiss franc strengthened as the US dollar faltered on Monday, following the lackluster momentum from the Jackson Hole Symposium. The USD/CHF pair traded around 0.8080, slipping by 0.15% for the day. Meanwhile, the US Dollar Index (DXY) slipped from last week's high of 99.72, settling at 99.41. The US dollar surged to a week-long high on Friday after Fed Chair Kevin Warsh's hawkish remarks at Jackson Hole.
Scotiabank analysts applauded Warsh for dispelling the impression of evasiveness and delivering a clear message on the Fed's 2% inflation target. However, tensions between the US and Iran and the resulting spike in oil prices could complicate the path to meeting the Fed's inflation objective. Markets are currently pricing a 65% likelihood of a rate hike next month, per the CME FedWatch tool.
The Swiss National Bank (SNB) is expected to maintain its policy rate at 0% for the remainder of 2026, with roughly 60% of surveyed bankers anticipating the same stance throughout 2027. Key economic releases include Swiss Retail Sales on Tuesday, the Consumer Price Index (CPI) and second-quarter GDP figures on Thursday.
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