Dollar Gains vs Franc as Iran Tensions Test Optimism

Key Moments

USD/CHF Holds Near Recent Highs

The USD/CHF pair is trading close to a two-month high around 0.7960 during the Asian session on Thursday, supported by a firmer US Dollar and a cautious risk backdrop. The Swiss Franc is under pressure as investors reassess geopolitical risks and central bank dynamics.

At the time referenced, the US Dollar Index (DXY) – which measures the Greenback against six major peers – is maintaining a two-day advance around the 100.00 mark, underpinning the move in USD/CHF.

Iran Developments Undermine Confidence in Diplomatic Progress

Late Thursday, US President Donald Trump stated on Truth.Social that he had once again postponed planned military strikes on Iran’s power plants at the request of Iranian officials, adding that talks with Tehran are going “very well”. According to his post, plans to destroy Iranian energy facilities have been put on hold for 10 Days, until Monday, April 6, 2026, at 8 P.M., Eastern Time.

However, mediators involved in the discussions have challenged this narrative. They reported that Iranian officials have not made such a request and are unlikely to accept Trump’s 15-point settlement framework. The plan reportedly includes reopening the Strait of Hormuz and limiting Tehran’s missile program, raising doubts about the durability of any perceived diplomatic progress.

Fed Expectations Shift Toward No Cuts – or a Hike

Beyond Middle East developments, changing expectations for US monetary policy are lending additional support to the Dollar. Market participants are increasingly speculating that the Federal Reserve will refrain from cutting interest rates this year.

According to the CME FedWatch tool, traders have now fully priced in scenarios in which the Fed either keeps rates unchanged or delivers at least one hike this year, a notable reversal from the outlook for two rate cuts that had prevailed before the conflict began.

SNB Intervention Risk Weighs on Swiss Franc

The Swiss Franc is also facing mild pressure following repeated signals from the Swiss National Bank about its readiness to counter excessive currency strength. The prospect of intervention has tempered demand for the CHF even as global risk sentiment deteriorates.

Last week, SNB Chairman Martin Schlegel reiterated at the post-policy press conference that the central bank’s willingness to step into the market to curb an overdone rally in the Swiss Franc has increased.

Market Snapshot

Related Headlines

• US President Trump delays Iran energy plant strikes until April 6
• US President Trump: Iranian negotiators begging to make a deal
• SNB’s Schlegel: Our willingness to intervene has increased