Swiss Franc holds steady as US Dollar stabilises amid uncertainty over Fed outlook

• Uncertainty over the Fed’s policy outlook keeps the US Dollar rangebound, leaving USD/CHF little changed.
• Despite elevated inflation, the Fed halted rate increases in October, with two dissenting officials calling for an immediate rise.
• October’s Swiss ZEW Expectations reading fell to -15.3, recording the steepest monthly deterioration in economic sentiment since March 2026.

An unchanged interest rate decision from the Federal Reserve (Fed), widely anticipated by markets, offered little guidance on the next policy step and left the US Dollar (USD) giving up its recent gains. During Thursday’s Asian session, USD/CHF trades near 0.8280, retaining gains after trimming its advance for the day.

With rates maintained at 3.75%–4.00%, the Fed said economic activity was continuing to grow. Resilient domestic spending, solid capital investment and strong productivity growth featured in the central bank’s official statement. On the labour market, the Fed noted that employment gains had matched growth in the workforce, while unemployment had remained broadly unchanged.

Although the Fed recognised that inflation pressures were still elevated, it suspended further rate increases to collect more data and judge the appropriate policy stance ahead. Two officials opposed the decision: Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack both voted for an immediate increase instead.

Stressing the continued strength of the underlying economy, Fed Chair Kevin Warsh reiterated the Federal Open Market Committee’s commitment to price stability and its 2% inflation objective. Turning to the policy calendar, he said the Fed would meet eight times next year, including once without a formal vote. He also expects six policy-setting meetings in 2028.

Wednesday’s release showed Switzerland’s ZEW Survey – Expectations index falling to -15.3 in October from September’s +2.6. Not since March 2026, when Middle East tensions weighed heavily on confidence, has sentiment suffered such a sharp monthly decline.

USD/CHF gathers upward momentum as UOB remains wary of a resistance break

Recent price developments have prompted UOB Group strategists to adjust their 1–3 week outlook for USD/CHF. Looking back, they explain that “two days ago (26 Oct, spot at 0.8250), we indicated that USD ‘has likely entered a range-trading phase between 0.8200 and 0.8290.’” The Dollar subsequently reached 0.8278. In its 27 October assessment, with spot at 0.8270, UOB said that “upward momentum is starting to build, and if USD closes above 0.8290, it could rise to 0.8320.” That view came with a qualification: “to sustain the momentum buildup, USD must not break below 0.8230 (‘strong support’ level).”

After that assessment, USD/CHF “rose and closed at 0.8290.” Reflecting on the move, UOB acknowledges that “while we would have preferred a more decisive close above 0.8290, the price action suggests USD could test 0.8320.” Its strategists nevertheless caution that “at this stage, the odds of a continued rise above this level are not high for now,” while adjusting their technical markers, with “the ‘strong support’ level now at 0.8250 instead of 0.8230.”