USD/CHF moves up as the Dollar finds stability

USD/CHF Recovers as US Dollar Stabilizes

The Swiss Franc (CHF) is under slight pressure against the US Dollar (USD) on Wednesday, with the Greenback regaining some strength after facing persistent declines earlier this week. At the latest check, the USD/CHF pair is hovering near 0.7940, ending a three-session slide.

This rebound in the US Dollar is primarily driven by technical factors, such as traders covering short positions and taking profits following the pair’s recent downward movement.

Despite this, overall market sentiment remains cautious due to ongoing trade disputes between the United States and the European Union. Tensions were heightened after President Donald Trump threatened tariffs as part of his campaign to assert control over Greenland.

Some of these concerns eased when Trump, speaking at the World Economic Forum in Davos, clarified that he would not pursue Greenland by force. This statement led to a slight improvement in risk sentiment and reduced the demand for the Swiss Franc as a safe-haven asset.

Nevertheless, gains for USD/CHF may be capped, as Trump’s protectionist trade policies and his involvement with the Federal Reserve continue to spark “Sell America” sentiment, undermining confidence in US financial markets.

Trump once again criticized Fed Chair Jerome Powell, accusing him of being slow to adjust interest rates and blaming him for hindering economic progress. He also indicated plans to name a new Fed chair in the near future, referencing recent rate decisions.

Attention now shifts to Washington, where the US Supreme Court is set to hear a case at 15:00 GMT related to Trump’s attempts to remove Fed Governor Lisa Cook.

In Switzerland, Swiss National Bank (SNB) Chairman Martin Schlegel commented at Davos that inflation in Switzerland could dip below zero for some months in 2026. However, he emphasized that this scenario would not pose a challenge for the SNB, which remains committed to maintaining price stability over the medium term.

Looking forward, investors are awaiting the release of delayed Personal Consumption Expenditures (PCE) inflation figures and the third-quarter Gross Domestic Product (GDP) data, both scheduled for Thursday.