- USD/CHF drops to a three-month low near 0.8760 as demand for the Swiss Franc strengthens.
- The US economy braces for potential short-term economic shocks.
- Investors anticipate further monetary easing from the SNB amid subdued inflation pressures.
USD/CHF hits a fresh three-month low near 0.8760 as the Swiss Franc strengthens on safe-haven demand amid growing concerns over the US economic outlook. Investors anticipate near-term economic turbulence in the US as President Donald Trump’s “America First” policies are expected to slow overall demand. In a Fox News interview on Friday, Trump described the current phase as a "transition" due to the significant economic changes underway.
Concerns over slowing US growth have fueled expectations of a Federal Reserve (Fed) rate cut in June, with the CME FedWatch Tool showing an increase in probability to 82% from 54% a month ago.
Meanwhile, the Swiss National Bank (SNB) is expected to continue easing monetary policy as inflation remains subdued. February’s Consumer Price Index (CPI) rose by 0.3%, slightly above the 0.2% forecast but slower than January’s 0.4% increase.
USD/CHF has dropped sharply after failing to retest its 15-month high of 0.9245. The pair’s outlook remains uncertain as it trades below the 20-week Exponential Moving Average (EMA) near 0.8920. The 14-week Relative Strength Index (RSI) has declined toward 40.00, with a potential bearish signal if it moves lower.
Key downside levels to watch include the December 6 low of 0.8735, the November 8 low of 0.8700, and the November 6 low of 0.8620. On the upside, a recovery above the psychological barrier of 0.9000 could push the pair toward the February 28 high of 0.9036 and the resistance at 0.9100.
USD/CHF weekly chart
