Overview
The USDCHF exchange rate is currently experiencing a recovery of the U.S. dollar, despite the upcoming release of Switzerland's consumer price index (CPI) figures. The CPI data is expected to show a slight year-on-year growth of 0.1%, which is an increase from the previous month's 0% growth.
Current Market Conditions
The USDCHF continues to trade within a range established in 2025, with support at 0.7877 and near-term resistance at 0.7900. There is potential for the exchange rate to move towards a tougher resistance level at 0.8100.
Swiss Economic Outlook
The Swiss economy is facing challenges, particularly due to the impact of U.S. tariffs on its exports. Although a recent trade deal has been struck, the KOF Institute has projected a gloomy outlook for Switzerland's GDP growth, estimating it to be 1.4% in 2025, slowing to 1.1% in 2026, before rising to 1.7% in 2027. The upward revision in GDP forecasts is attributed to the easing of trade policies, which will reduce U.S. tariffs on Swiss exports significantly.
While the pharmaceutical sector has seen an increase in exports to the U.S., other sectors such as watches and machinery have been adversely affected by tariffs. Additionally, weak demand from China is expected to continue impacting Swiss exports, although demand from Europe remains strong.
U.S. Dollar Recovery
The U.S. dollar has shown signs of recovery in recent weeks, influenced by rising geopolitical concerns and a divided Federal Reserve regarding interest rate policy. Recent minutes from a Federal Reserve policy meeting indicated that while most participants supported a rate cut, there were concerns about the progress towards the 2% inflation target, which has tempered expectations for rapid rate cuts.
Looking ahead, Jerome Powell is expected to step down as head of the Federal Reserve in 2026, with speculation that Donald Trump may appoint a new chair who would favor reducing borrowing rates.