USD/CHF Weakens, US Dollar Pressured by Interest Rate Issues and Fed Politics
The USD/CHF pair weakened and traded around 0.7920 in Asian trading on Friday. This weakening occurred because the US dollar was pressured by market expectations that the Federal Reserve would cut interest rates twice more in 2026. Previously, the Fed had already lowered interest rates by 75 basis points throughout 2025 in response to a weakening labor market, even though inflation remained relatively high.
Sentiment towards the dollar was also influenced by US President Donald Trump's plan to appoint a new Fed Chair in January, replacing Jerome Powell, whose term ends in May. The market believes the new chair has the potential to bring a lower interest rate policy. However, the minutes of the December FOMC meeting showed divided views, with some officials wanting to halt cuts if inflation continues to fall, while others favored holding rates temporarily.
Meanwhile, the Swiss Franc gained support as a safe-haven asset amid rising global geopolitical tensions. The improving Swiss economy also strengthened the CHF, as reflected in the KOF Economic Indicator, which rose to 103.4 in December, its highest since September 2024. This combination of global sentiment and economic data kept USD/CHF under pressure heading into early 2026. (az)
Source: Newsmaker.id
