Swiss Franc gains as US Dollar weakens on Fed uncertainty

The Swiss Franc (CHF) experienced a gain as the US Dollar (USD) weakened due to uncertainty surrounding the Federal Reserve's (Fed) interest rate decisions. The USD/CHF pair fell to around 0.8090 during Asian trading hours, following a Reuters poll indicating that most economists believed the Fed would likely maintain its interest rates steady through September 15-16 and for the rest of the year.

Economic data, including strong August Consumer Price Index figures, have been released, with upcoming US Producer Price Index and Consumer Price Index reports providing potential insights into the Fed's monetary policy outlook. The USD/CHF pair's depreciation was attributed to the Swiss Franc's (CHF) strong support from the expectation of tighter monetary policy and higher inflation from major central banks, alongside continued demand for safe-haven assets.

The Swiss Bankers Association survey showed that all bankers expect the Swiss National Bank to maintain its policy rate at 0% by year-end. Strategists at UOB Group remain neutral on USD/CHF, expecting a range between 0.8055 and 0.8155 for the currency pair over the next one to three weeks. The Swiss Franc is considered a safe-haven asset, as Switzerland's economy is stable, with a strong export sector and big central bank reserves.

The country's currency is also seen as a good choice for investors fleeing from risks due to Switzerland's perceived status and neutrality in global conflicts.