Swiss Franc retreats further, US Dollar firms up with Fed minutes in focus

The Swiss Franc (CHF) continued its decline for the third consecutive day against the US Dollar (USD) on Wednesday, reaching a level of 0.8323 as of the time of reporting. The USD/CHF pair has experienced a rebound above 0.8300, driven by a stronger US Dollar ahead of the Federal Reserve’s (Fed) minutes release and an uptick in Oil prices.

The U.S. central bank raised interest rates for the first time in three years in September, as anticipated, with Chair Kevin Warsh delivering a firm hawkish message during the meeting. Investors began betting on consecutive rate hikes following the meeting, but soft inflation and employment reports released last week have dampened those expectations.

Despite this, markets remain optimistic that the bank will raise rates again in December and at least once more in early 2027. The appreciation of Brent Oil prices by nearly $4 from Tuesday's lows, reaching above the $100 mark following news of new attacks by Iran-backed Houthis on Saudi Arabia, poses a challenge for crude-importing countries like Switzerland, putting additional pressure on the Swiss Franc.

In Switzerland, the Swiss National Bank reported that the country's Foreign Currency reserves remained relatively stable at CHF 770.47 billion in September, up from CHF 770 billion in August. However, the impact on the Swiss Franc was minimal. Analysts at UOB Group suggest that the USD/CHF pair has likely entered a range-trading phase between 0.8245 and 0.8365.

In the near term (one to three weeks), they anticipate the pair to remain confined within this broad consolidation band.