Dollar Strength and Soft Swiss Data Push USD/CHF Higher

Key Moments

Safe-Haven Flows Support USD/CHF

USD/CHF extended its upward move for a second consecutive day, changing hands around 0.8100 during Asian trading on Monday. The pair gained as investors rotated into the US Dollar on the back of heightened safe-haven demand linked to geopolitical risks in the Middle East.

According to Bloomberg, the US Central Command (CENTCOM) conducted additional strikes on Sunday evening, with the stated objective of reducing Iran’s capacity to attack civilian vessels transiting the waterway.

Reuters reported that US forces have struck more than 300 Iranian targets over three nights, including 140 on Saturday alone. At the same time, Washington and Tehran issued opposing statements about whether the strait remains open to commercial shipping.

Middle East Tensions, Oil Prices, and Fed Expectations

The US Dollar also drew support from intensifying US-Iran missile exchanges, which pushed oil prices higher and fueled concerns about renewed inflation pressures and the prospect of higher Federal Reserve interest rates.

Market participants will focus on the upcoming US Consumer Price Index (CPI) release on Tuesday for further guidance on the Federal Reserve’s policy direction. Consensus expectations point to a 0.1% month-on-month decline in headline CPI for June, while core CPI is projected to increase by 0.3% over the same period.

Traders anticipate that the Federal Reserve will deliver one additional rate hike before year-end. Attention will also center on Fed Chair Kevin Warsh, who is scheduled to make his first formal appearance before the US Congress on Tuesday.

Swiss Data Underscores Dovish SNB Backdrop

On the Swiss side, sentiment data continued to deteriorate. Switzerland’s consumer confidence index fell to -36 in June 2026, compared with -32 in June 2025, and came in slightly weaker than the market expectation of -35.

Despite the weakening mood among households, Swiss inflation stayed very subdued, holding flat on a month-on-month basis and running at just 0.5% annually in June. With price pressures so limited and domestic sentiment deeply negative, the Swiss National Bank faces no immediate pressure to tighten policy.

Instead, the soft data backdrop leaves room for the SNB to consider rate cuts or direct action in the foreign exchange market to deliberately soften the franc. Such prospects reduce the appeal of CHF for investors seeking higher yields.