Swiss Franc Holds Steady as US Dollar Stabilises Amid Uncertainty Over Fed Outlook

• USD/CHF remains largely steady, with the US Dollar trading sideways as uncertainty clouds the Fed’s policy outlook.
• Despite elevated inflation, the Fed halted rate increases in October; two officials dissented and sought an immediate interest rate hike.
• Swiss economic sentiment recorded its steepest monthly fall since March 2026, with ZEW Expectations tumbling to -15.3 in October.

USD/CHF remains in positive territory despite giving up part of its intraday advance, hovering near 0.8280 in Thursday’s Asian session. Recent gains in the US Dollar (USD) faded after the Federal Reserve (Fed) left interest rates on hold, in line with widespread expectations, but offered little guidance on its next policy decision.

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

Although the Fed recognised that inflation pressures remained high, it opted to halt further rate increases while collecting more data to judge the appropriate path for monetary policy. Two policymakers opposed the decision: Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack voted for an immediate rate hike.

Stressing the underlying strength of the economy, Fed Chair Kevin Warsh reiterated the Federal Open Market Committee’s commitment to price stability and its 2% inflation objective. Warsh also set out the central bank’s forthcoming calendar: eight meetings are planned for next year, including one without a formal vote, while he expects six policy-setting meetings in 2028.

Swiss sentiment deteriorated sharply in Wednesday’s release, as Switzerland’s ZEW Survey – Expectations index fell from +2.6 in September to -15.3 in October. The monthly decline was the largest since March 2026, when Middle East tensions dealt a heavy blow to confidence.

Can USD/CHF Break Resistance as Momentum Builds? UOB Remains Cautious

Recent price developments have prompted UOB Group strategists to adjust their 1–3 week assessment of USD/CHF. Looking back, they note 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 advanced to 0.8278. In its 27 October update, when spot stood 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 assessment came with a caveat: “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.” Acknowledging the strength of the move, UOB says that “while we would have preferred a more decisive close above 0.8290, the price action suggests USD could test 0.8320.” Nevertheless, the strategists believe that “at this stage, the odds of a continued rise above this level are not high for now,” and have adjusted their technical markers, with “the ‘strong support’ level now at 0.8250 instead of 0.8230.”