The Swiss franc will be in the spotlight this week, as investors focus on the upcoming Federal Reserve and Swiss National Bank (SNB) interest rate decisions. The USD/CHF exchange rate was trading at 0.7850, down by 15% from its highest point in 2025.
Similarly, the EUR/CHF pair was at 0.9065, down 6.17% below its last year high as the Swiss franc strength has continued amid its safe-haven appeal.
Swiss Franc has become a safe haven amid rising risks
The USD/CHF and EUR/CHF pairs have slipped in the past few months as demand for the Swiss franc has jumped amid the elevated market risks.
These risks started rising last year when President Donald Trump announced his tariffs against all countries, including Switzerland, which at some point received the highest reciprocal tariff from the United States.
The world experienced another risk after Trump started his attacks on Jerome Powell, the head of the Federal Reserve for not cutting interest rates. This crisis escalated late last year when the Justice Department sent subpoenas to the Federal Reserve. Trump also failed in his attempts to remove Lisa Cook.
Most recently, demand for the Swiss franc has jumped after Trump and Benjamin Netanyahu launched an attack against Iran, claiming that the country was planning to develop nuclear weapons, and possibly attack the United States.
Swiss National Bank to outline plans to tame the strong currency
The USD/CHF and the EUR/CHF pairs will be in the spotlight as the Swiss National Bank delivers its interest rate decision, highlighting some of the measures it is taking to curtail the strength of the Swiss franc.
A strong franc normally impacts the Swiss economy negatively by making its exports more expensive. This is important as Switzerland is mostly an export-oriented country, selling goods worth over $287 billion a year. Its imports jumped to $232 billion.
Analysts expect the SNB to leave interest rates unchanged at 0%, where they have remained at in the past few months. It slashed rates from the 2024 high of 1.75%, and analysts suspect that the bank may decide to move rates to the negative zone this year.
Federal Reserve interest rate decision
The next key catalyst for the USD/CHF will be the upcoming Federal Reserve interest rate decision, which will come out on Wednesday.
Economists believe that the bank will leave interest rates unchanged between 3.50% and 3.75% as it contends with the rising stagflation concerns. Inflation is expected to keep rising as energy, fertilizer, and shipping costs continue rising amid the ongoing Iran war.
At the same time, the country’s economic growth has largely stalled this year, while the labor market is struggling, with the unemployment rate rising to 4.4% and the economy shedding over 92k jobs in February.
EUR/CHF technical analysis
EUR/CHF chart | Source: TradingView
The three-day chart shows that the EUR/CHF exchange rate remains in a bear market as investors have preferred the Swiss franc compared to the euro.
It dropped below the important support level at 0.9200, its lowest level in July and November 2024, and April and November last year. Moving below that level confirmed the bearish outlook.
The pair has remained below all moving averages. Most recently, it formed a small hammer candlestick pattern, which often leads to a reversal.
Therefore, the pair may continue rising as bulls target the key resistance level at 0.9210, confirming a break-and-retest pattern, which often leads to more downside.
USD/CHF technical analysis
USD/CHF chart | Source: TradingView
The three-day chart shows that the USD/CHF pair remains in a bear market and is hovering near its lowest level in years. It trades at 0.7833, slightly above the year-to-date low of 0.7600.
The pair sits below all its moving averages and the Supertrend indicator. Therefore, the most likely scenario is where the USD/CHF pair continues falling, as market risks will continue rising in Trump’s era.
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