Dollar Rises vs Swiss Franc on Fed Signals

Key Moments

USD/CHF trades near 0.7750 after rebounding from an intraday low around 0.7694.
Switzerland’s trade surplus widens to CHF 3,818 million as exports rise and imports decline, while Industrial Production drops 0.7% YoY in Q4.
Federal Reserve Meeting Minutes point to a cautious stance on rate cuts, underpinning US Dollar strength despite expectations of two cuts later in the year.

Swiss Franc Slips as USD/CHF Rebounds

The Swiss Franc weakened against the US Dollar on Thursday as renewed demand for the Greenback pushed USD/CHF higher. The pair was trading around 0.7750 at the time of writing, recovering after briefly touching an intraday low near 0.7694.

Swiss Trade Data Improves, Industrial Output Softens

Fresh Swiss economic figures failed to provide meaningful support for the Franc. Exports rose in January to CHF 22,229 million from a previous CHF 19,866 million, while imports decreased to CHF 18,411 million from CHF 18,932 million. The combination of stronger exports and weaker imports lifted the trade surplus to CHF 3,818 million, up from CHF 934 million.

However, the industrial sector showed signs of strain. Industrial Production contracted 0.7% year-on-year in the fourth quarter, a reversal from the earlier 2% expansion.

Swiss Economic Indicator	Latest Reading	Previous Reading
Exports (January)	CHF 22,229 million	CHF 19,866 million
Imports (January)	CHF 18,411 million	CHF 18,932 million
Trade Surplus (January)	CHF 3,818 million	CHF 934 million
Industrial Production (Q4, YoY)	-0.7%	2%

Fed Minutes Reinforce Cautious Policy Outlook

The US Dollar’s advance was driven primarily by the tone of the Federal Reserve Meeting Minutes released on Wednesday, which highlighted a cautious approach to policy easing amid only gradual progress on disinflation.

According to the Minutes, several officials indicated it would probably be appropriate to keep interest rates unchanged for a period while they evaluate new economic data. Policymakers also maintained the option of raising rates again if inflation fails to move convincingly toward the target.

At the same time, some participants acknowledged that rate reductions could be warranted later this year should price pressures continue to align with projections. The Minutes also stated that “the vast majority of participants judged that labor market conditions had been showing some signs of stabilization.”

Market Pricing and DXY Performance

Recent US economic releases have generally supported the case for the Fed to remain on hold in the near term, even as market participants continue to anticipate around two rate cuts in the second half of the year.

Expectations for eventual lower rates could cap further gains in the Greenback, even as current policy signals provide near-term support. The US Dollar Index (DXY), which tracks the currency against a basket of six major counterparts, was trading around 97.82, its highest level since February 6.

Data Calendar: Jobless Claims, Philly Fed, and Key Friday Releases

The US macroeconomic schedule for Thursday is relatively limited, featuring weekly Initial Jobless Claims and the Philadelphia Fed Manufacturing Survey.

Investor attention is likely to turn more strongly toward Friday’s releases, including the Core Personal Consumption Expenditures (PCE) Price Index and the advance estimate of fourth-quarter US Gross Domestic Product (GDP), which could shape expectations for the Fed’s policy path.