Swiss Franc snaps three-day losing streak against US Dollar, outlook remains fragile
- The Swiss Franc regains ground against the US Dollar after underperforming for three straight trading days.
- Fears of a prolonged US-Iran war will likely keep oil prices higher.
- The Fed is expected to leave interest rates unchanged next week.
The Swiss Franc (CHF) gains ground against the US Dollar (USD) after a three-day losing streak on Thursday. The USD/CHF pair corrects to near 0.8136 after struggling to extend the advance beyond the yearly high at around 0.8152.
The Swiss Franc pair attracts slight bids as the US Dollar corrects despite fears of a prolonged war between the United States (US) and Iran intensifying. At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.13% lower to near 101.00.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | -0.10% | -0.05% | -0.15% | -0.26% | 0.00% | -0.10% | |
| EUR | 0.12% | 0.03% | 0.09% | -0.04% | -0.14% | 0.14% | 0.02% | |
| GBP | 0.10% | -0.03% | 0.04% | -0.08% | -0.17% | 0.11% | -0.01% | |
| JPY | 0.05% | -0.09% | -0.04% | -0.11% | -0.22% | 0.05% | -0.06% | |
| CAD | 0.15% | 0.04% | 0.08% | 0.11% | -0.12% | 0.16% | 0.04% | |
| AUD | 0.26% | 0.14% | 0.17% | 0.22% | 0.12% | 0.28% | 0.18% | |
| NZD | -0.00% | -0.14% | -0.11% | -0.05% | -0.16% | -0.28% | -0.13% | |
| CHF | 0.10% | -0.02% | 0.01% | 0.06% | -0.04% | -0.18% | 0.13% |
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).
Oil prices are surging continuously amid escalating fears of global energy supply amid the Middle East crisis, a scenario that would add uncertainty to the Federal Reserve’s (Fed) monetary policy path, even as US inflationary pressures cooled down in June.
In the Asian session, the US Central Command (CENTCOM) confirmed through a post on X that it has completed the 12th round of strikes against Iran.
Earlier in the day, Iran warned of war expansion if the US started attacking Iranian infrastructure. “Our defence doctrine is clear: eye for an eye. Any aggression against Iran, including our infrastructure, will compel a powerful and decisive response,” Iran’s Foreign Minister Abbas Araghchi said. This was a response to US President Donald Trump’s post on Wednesday, in which he stated that the US will destroy one bridge or power plant of Iran if Iran bombs a ship passing through the Strait of Hormuz.
Going forward, the next major trigger for the US Dollar will be the Federal Reserve’s (Fed) monetary policy announcement next week, in which the central bank is expected to leave interest rates unchanged.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
