The Swiss Franc (CHF) remained steady against the US Dollar (USD) on Tuesday, with the USD/CHF pair trading flat around 0.8184 after retreating from an intraday high of 0.8205, which marked its highest level since June 2025 [1]. This stabilization comes as traders adopt a cautious stance ahead of the Federal Reserve’s monetary policy announcement scheduled for Wednesday [1]. The US Dollar weakened as oil prices continued their pullback, following a pause in hostilities between the United States and Iran, which in turn eased inflation concerns and pushed US Treasury yields lower [1].
US President Donald Trump commented that it was a “good time for Iran to make a deal,” but also warned that the US would “go back and finish the job” if no agreement was reached [1]. The US Dollar Index (DXY), which measures the Greenback against six major currencies, traded around 101.35, down from 101.64, its highest level in a month [1]. US economic data provided little support, as the Conference Board’s Consumer Confidence Index fell to 90.8 in July from a revised 92.2 in June [1].
Market expectations ahead of the Federal Reserve meeting are that the central bank will leave the federal funds rate unchanged at 3.50%-3.75%, though the CME FedWatch Tool indicates a roughly 30% probability of a 25-basis-point rate hike [1]. US inflation remains well above the Fed’s 2% target, and while lower oil prices have eased some immediate inflation concerns, upside risks persist. Even if rates remain unchanged, policymakers are expected to maintain a hawkish stance, which could continue to support the US Dollar [1].
The Swiss Franc has been one of the worst-performing major currencies since the onset of the US-Iran war. The Swiss National Bank’s zero-interest-rate policy has made the Franc attractive for carry trades, while broad-based US Dollar strength and the SNB’s readiness to counter excessive Franc appreciation have added to the pressure on the currency [1]. On the day, the US Dollar was the strongest against the Australian Dollar, and the CHF weakened by 0.12% against the USD [1].
CONCLUSION
The Swiss Franc’s stability against the US Dollar reflects market caution ahead of the Federal Reserve’s policy decision, with traders closely watching for any signals on future rate moves. Despite some easing in inflation concerns due to lower oil prices, persistent upside risks and a likely hawkish Fed stance could keep the US Dollar supported. The Swiss Franc remains under pressure due to the SNB’s policies and ongoing global uncertainties.