The Swiss Franc (CHF) has emerged as the weakest major currency into the weekly close, with USD/CHF climbing to its highest level since November 2025, trading around 0.8080 on Friday [1][2]. This move comes amid diverging monetary policy expectations between the Federal Reserve (Fed) and the Swiss National Bank (SNB), which have tilted demand toward the US Dollar (USD) over the Franc [2]. The US Dollar Index (DXY) also traded around 100.80 after reaching 101.13 earlier in the day, its highest since May 2025 [2].
The SNB held its policy rate at 0% as widely anticipated and only slightly raised its near-term inflation forecast [1][2]. SNB Chairman Martin Schlegel stated on Thursday that "at the moment it is not necessary to act on interest rates" and that "everything between 0% and 2% is fine on inflation" [2]. The SNB also softened its intervention language, adding an "if necessary" caveat to its previous warnings about acting against a strong Franc, which traders interpreted as a green light to continue selling the currency [1]. Analysts noted that the SNB had previously sold an estimated $3 billion of Francs in March to curb strength, and the current stance suggests contentment with a weaker Franc [1].
In contrast, the Fed maintained rates but struck a hawkish tone, with policymakers reiterating their commitment to bringing inflation back to the 2% target and the updated dot plot showing that nearly half of FOMC members expect at least one rate hike this year [2]. This policy divergence has supported the USD/CHF rally, with technical indicators such as the Relative Strength Index (RSI) at 68.6 approaching overbought territory and the pair trading above both the 100-day and 200-day Simple Moving Averages (SMAs) at 0.7849 and 0.7907, respectively [2].
Immediate resistance for USD/CHF is seen at 0.8100, with further upside targets at 0.8300 and 0.8500, while initial support lies at the 200-day SMA (0.7907) and the 100-day SMA (0.7849) [2]. The US Dollar was the strongest against the Swiss Franc among major currencies today, gaining 0.37% [2].
The Franc's weakness is attributed not to a post-war safe-haven unwind, but to the SNB's ongoing efforts to keep the currency soft, low Swiss inflation, and the Franc's role as a funding currency in carry trades as volatility subsides [1].
CONCLUSION
The Swiss Franc's sharp decline is driven by the SNB's dovish stance and lack of intervention urgency, while the Fed's hawkish outlook supports further USD/CHF gains. Market sentiment remains bullish for USD/CHF, with technicals and policy divergence favoring continued strength in the pair.