Switzerland’s latest CPI release will be released on Thursday, but it may not be enough to slow the recent U.S. dollar recovery.
USDCHF – Daily Chart
The USDCHF continues to trade within the range established in 2025, with support at 0.7877. Ahead of the near-term resistance at 0.7900, there is room to move back to the tough resistance area of 0.8100.
The Swiss economy will release its latest consumer price index figures on Thursday at 2:30 pm HKT. The figure is expected to show 0.1% year-on-year growth, up from 0% a month ago. The lack of inflation relative to other European nations is keeping a lid on the Swiss franc’s price.
The U.S. dollar is now recovering in price after a decline in 2025. The imposition of the country’s tariff agenda started to negatively impact the Swiss economy. Although the country has struck a deal, it could still weigh on GDP figures in the near term.
The KOF Institute offered a gloomy outlook for the country after the recent trade deal. The group projected real GDP growth of 1.4% in 2025, slowing to 1.1% in 2026, before increasing to 1.7% in 2027. The upward revision for the coming years is driven by the easing of trade policy, which reduces U.S. tariffs on Swiss exports from 39% to 15%.
Exports of watches, machinery, and electrical engineering were affected by tariffs throughout the year, but the pharmaceutical sector recorded substantial increases in exports to the United States. Although the tariff effects proved smaller than previously assumed, the outlook for exports to the U.S. remains subdued. Weak demand from China will continue to weigh on results, but will be offset by robust demand from Europe.
The U.S. dollar has improved in recent weeks as rising geopolitical concerns align with a divided Federal Reserve on the path of interest rate policy.
“Most participants” ultimately supported a cut, with “some” arguing that it was an appropriate strategy “that would help stabilize the labor market,” the recent policy meeting minutes said.
However, others expressed concern that progress towards the committee’s 2% inflation objective had stalled. That cloudy outlook has diminished some of the anticipation for rapid rate cuts, but Jerome Powell is set to leave his role as head of the Fed in 2026. From there, Donald Trump is expected to implement a new Fed Chair who will move to reduce borrowing rates.
