Swiss National Bank (SNB) Keeps 0% Rate, USD/CHF Bulls Test $0.8000 Barrier
The Swiss National Bank (SNB) left its benchmark Sight Deposit Rate at 0% on Thursday after six rate cuts since March 2024.
Quick overview
- The Swiss National Bank maintained its Sight Deposit Rate at 0% while downgrading GDP growth forecasts for 2025 and 2026 due to subdued domestic demand.
- Rising US tariffs pose risks to Switzerland's export-heavy industries, with potential further weakening of growth amid global trade uncertainties.
- In the US, the dollar remains steady as the Fed signals more easing, with a 92% chance of another rate cut in October following recent softer economic data.
- The USD/CHF pair has broken out of a contracting triangle, with bullish momentum supported by higher lows and key resistance levels identified.
The Swiss National Bank (SNB) left its benchmark Sight Deposit Rate at 0% on Thursday after six rate cuts since March 2024. As expected, but with a cautious tone. They downgraded 2025 GDP growth to 0.2% from 1-1.5% and 2026 growth to 1% with 0.0% inflation by mid-2028, meaning subdued domestic demand.
The SNB mentioned rising US tariffs as a risk, warning that export-heavy industries like machinery and watchmaking are facing headwinds. With unemployment rising and global trade uncertainty deepening, they said Switzerland’s growth could weaken further if protectionist measures intensify.
Fed Signals and Softer US Data
Across the pond, the US dollar was steady around 97.80 on the DXY as investors balanced dovish Fed signals with softer data. Fed Chair Jerome Powell said labor market weakness is outweighing inflation concerns, validating the September rate cut. San Francisco Fed President Mary Daly said more easing and Chicago Fed’s Austan Goolsbee said be cautious on back-to-back cuts.
Meanwhile, the US S&P Global Composite PMI fell to 53.6 from 54.6, with manufacturing at 52.0. Traders are now pricing in 92% chance of another rate cut in October, meaning more easing is expected.
USD/CHF Technicals: Breakout Eyes $0.8000
The USD/CHF pair has broken out of a contracting triangle on the 4-hour chart and is trading at $0.7968. Above the 50-SMA at $0.7924 and the 100-SMA at $0.7985 is the next hurdle.
A series of higher lows since mid-September’s $0.7855 low is supporting the bullish view.Candle action confirms this: a strong breakout candle above resistance means conviction. RSI is 64, not overbought. Resistance is at $0.7975 and $0.8006, with room to $0.8038. Support is at $0.7943, then $0.7924 and $0.7911.
Trade: A breakout buy above $0.7975-$0.7980 looks good, with stops under $0.7920. Targets are $0.8006 and $0.8038. More cautious traders may wait for a hammer or bullish engulfing candle before getting in.
For now, fundamentals and technicals are in balance, but $0.8000 is the ceiling.
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