Swiss Franc slides as hot US inflation reinforces hawkish Fed outlook
- Swiss Franc falls to its weakest level since May 2025 following the US inflation report.
- US Dollar and Treasury yields climb as traders raise October Fed rate-hike bets.
- The widening policy divergence between the Fed and SNB keeps the Swiss Franc on the defensive.
USD/CHF climbs to its highest level since May 2025 on Wednesday as hotter-than-expected US inflation data strengthen expectations of further Federal Reserve (Fed) interest rate hikes. The US Dollar (USD) rallies alongside a rebound in US Treasury yields, leaving the Swiss Franc (CHF) on the back foot. At the time of writing, the pair trades around 0.8390, up 0.77% on the day.
The US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, rises toward 102.85, its strongest level since April 2025. Meanwhile, the benchmark 10-year US Treasury yield stands near 5.27% after briefly climbing above 5.30%, remaining well above its daily low of around 5.18%.
Data released by the US Bureau of Labor Statistics showed annual headline inflation rose to 3.7% in September, above the 3.6% forecast, while core inflation climbed to 2.6%, exceeding expectations of 2.5%. Monthly headline CPI increased 0.6%, in line with forecasts, while core CPI rose 0.3%, above the 0.2% expected.
Higher energy prices remain a major driver of headline inflation. With no sign of a near-term agreement between the US and Iran to reopen the Strait of Hormuz, and fighting between Saudi Arabia and Yemen’s Houthis adding to supply risks, energy-driven price pressure could persist for longer, complicating the Fed’s efforts to bring inflation back to its 2% target.
Traders now price in a 43% chance of a rate hike at the October 27-28 meeting, up from 22% before the CPI release, while the probability of a December hike stands near 95%, according to the CME FedWatch Tool.
The bar for a Swiss National Bank (SNB) rate hike appears relatively high. In its September assessment, the central bank forecast average inflation of 0.7% this year and 0.8% in both 2027 and 2028, remaining within its 0%-2% price stability range over the entire forecast horizon.
Traders now await US Producer Price Index (PPI) and retail sales figures due on Thursday. With few major releases scheduled on the Swiss economic calendar for the rest of this month, US data and shifts in Fed expectations are likely to remain the main drivers of USD/CHF in the near term.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.70% | 0.81% | 0.32% | 0.44% | 0.40% | 0.74% | 0.71% | |
| EUR | -0.70% | 0.11% | -0.39% | -0.22% | -0.31% | 0.02% | 0.00% | |
| GBP | -0.81% | -0.11% | -0.50% | -0.39% | -0.41% | -0.08% | -0.10% | |
| JPY | -0.32% | 0.39% | 0.50% | 0.17% | 0.12% | 0.46% | 0.44% | |
| CAD | -0.44% | 0.22% | 0.39% | -0.17% | -0.04% | 0.28% | 0.27% | |
| AUD | -0.40% | 0.31% | 0.41% | -0.12% | 0.04% | 0.33% | 0.31% | |
| NZD | -0.74% | -0.02% | 0.08% | -0.46% | -0.28% | -0.33% | -0.01% | |
| CHF | -0.71% | -0.00% | 0.10% | -0.44% | -0.27% | -0.31% | 0.00% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
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