Another Bullish Break Above 0.88 for USDCHF, Despite SNB Not “Committing” to Rate Cuts

The volatility in the CHF to USD rate picked up today, as USD/CHF made a break higher today, after stalling below 0.88, following another bullish move higher last week on Donald Trump’s presidential victory. The 100 daily SMA which was acting as resistance as well for broken, which opens the door for 0.89 and 0.90eventually.

Since dipping below 0.84 in early September, USD/CHF has gained approximately 4 cents, though it faced resistance at the 100-day simple moving average (SMA) in October. Following last week’s US elections, the pair surged by 1.5 cents on Wednesday, reaching the next moving average level.

USD/CHF Chart Daily – The 100 SMA Is Broken

After a slight pullback on Thursday, buying interest returned on Friday, with the pair breaking above 0.88 today. Buyers may now target 0.89 and 0.90 as potential resistance levels, supported by bullish USD fundamentals and the upward trend on the monthly chart. The lack of a larger war in the Middle East is also weighing on safe havens such as the JPY, Gold and the CHF.

SNB Sight Deposits Released by the SNB – 11 November 2024

• SNB total sight deposits w.e. 8 November CHF 463.5 bn vs CHF 456.6 bn prior
• Domestic sight deposits CHF 455.4 bn vs CHF 447.8 bn prior

Swiss National Bank (SNB) Policy Outlook

While some may be surprised by SNB’s stance, it appears the bank is managing expectations about interest rate cuts to prevent markets from assuming a return to zero rates. The SNB is likely to lower its policy rate by 25 basis points in December, bringing it to 0.75%, one of the lowest among major central banks apart from the Bank of Japan. The current policy rate is 1.00%. This adjustment is also aimed at managing the strength of the Swiss franc, with further rate decisions anticipated in 2025.

Remarks by SNB Vice Chairman, Antoine Martin

• The SNB has made no firm commitment to continue cutting interest rates.
• Central banks should avoid overly rigid forward-looking guidance.
• Economic conditions between now and the next meeting could change, potentially making current guidance obsolete.
• The SNB’s future actions will be based on the economic situation assessed in December.
• Martin expects the Swiss franc to appreciate structurally over time due to low Swiss inflation relative to other regions, though in real terms, this appreciation has been more moderate.

USD/CHF Live Chart

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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