Key Moments
- USD/CHF traded around 0.8010 on Wednesday, showing virtually no change on the day.
- December US CPI printed at 2.7% YoY and core CPI at 2.6% YoY, reinforcing expectations for a Fed policy pause.
- Political concerns in the US and ongoing geopolitical tensions supported demand for the Swiss Franc as a safe-haven currency.
USD/CHF Steady as Macro Forces Counterbalance
USD/CHF was quoted near 0.8010 on Wednesday, leaving the pair essentially unchanged at the time of writing. Modest support for the US Dollar (USD) followed the latest US inflation release, but that strength was partially offset by continued safe-haven demand for the Swiss Franc (CHF).
Traders reacted to inflation data that broadly aligned with prior readings and market expectations, leaving the broader policy narrative for the Federal Reserve (Fed) largely intact and limiting directional momentum in the pair.
US Inflation Data Firm Up Expectations for Fed Pause
Data from the Bureau of Labor Statistics showed that the Consumer Price Index (CPI) increased by 2.7% year-on-year in December. This reading matched both the previous figure and consensus forecasts. Core CPI, which strips out food and energy, registered a 2.6% year-on-year rise, falling short of expectations for a move up to 2.7%.
On a month-on-month basis, headline CPI advanced by 0.3%, while core CPI rose by 0.2%. These outcomes reinforced the view that the Fed is likely to maintain its current interest rate settings at its upcoming meeting.
Market pricing continued to indicate that a first rate cut is not anticipated before mid-year. That outlook provided an underlying fundamental pillar for the US Dollar against the Swiss Franc, even as broader risk and political factors continued to influence flows.
In this environment, attention among investors has shifted toward forthcoming US data, including Retail Sales and the Producer Price Index (PPI), which will be used to further gauge the trajectory of the US economy and validate or challenge existing policy expectations.
Safe-Haven Demand for CHF Caps USD/CHF Upside
Alongside macroeconomic factors, the political landscape in the United States and ongoing geopolitical tensions remained important drivers of currency markets. Concerns about the independence of the Federal Reserve, combined with elevated tensions in the Middle East, continued to support safe-haven currencies such as the Swiss Franc.
This backdrop helped sustain demand for CHF and constrained the upside for USD/CHF, even as the US Dollar showed resilience. Market participants continued to weigh the appeal of yield-related USD support against the perceived safety offered by the Swiss Franc.
US Dollar Performance Against Major Currencies
The following table summarizes the intraday percentage change of the US Dollar relative to major currencies. On the day, the US Dollar showed its strongest performance against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.01% | -0.08% | -0.27% | -0.04% | 0.05% | -0.01% | 0.03% | |
| EUR | 0.01% | -0.06% | -0.28% | -0.03% | 0.07% | 0.00% | 0.04% | |
| GBP | 0.08% | 0.06% | -0.19% | 0.03% | 0.13% | 0.06% | 0.11% | |
| JPY | 0.27% | 0.28% | 0.19% | 0.24% | 0.33% | 0.26% | 0.31% | |
| CAD | 0.04% | 0.03% | -0.03% | -0.24% | 0.10% | 0.03% | 0.07% | |
| AUD | -0.05% | -0.07% | -0.13% | -0.33% | -0.10% | -0.06% | -0.03% | |
| NZD | 0.01% | -0.00% | -0.06% | -0.26% | -0.03% | 0.06% | 0.04% | |
| CHF | -0.03% | -0.04% | -0.11% | -0.31% | -0.07% | 0.03% | -0.04% |
The heat map is interpreted using the currency in the left-hand column as the base and the currency in the top row as the quote. For instance, selecting the US Dollar from the left column and moving across to the Japanese Yen cell provides the percentage change for USD/JPY.
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