USD/CHF remains above 0.7800 as US Dollar gains on risk-off mood

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USD/CHF inches higher after posting 1.25% losses in the previous day, trading around 0.7820 during the Asian hours on Friday. The pair gains ground as the safe-haven demand supports the US Dollar (USD) against its major peers.

USD/CHF rises as the US Dollar strengthens on safe-haven demand after Trump vowed to maintain the Iran port blockade.
US Core PCE rose 3.2% YoY, up from 3% in February and in line with forecasts.
Thursday's ZEW Swiss Expectations rose to -30.3 in April from -35.0, recovering from a six-month low.

Market sentiment remains cautious after Bloomberg reported on Thursday that US President Donald Trump stated he would continue the naval blockade of Iranian ports, amid concerns that the strategically important Strait of Hormuz may not reopen in the near term. Trump also criticized congressional efforts aimed at restricting his war powers, including a recent Senate proposal that was rejected earlier in the day.

On Thursday, data showed that the US Personal Consumption Expenditures (PCE) Price Index rose to 3.5% in March from 2.8% in February, in line with market expectations. On a monthly basis, the index increased by 0.7%. The core PCE Price Index, the Federal Reserve’s (Fed) preferred inflation gauge excluding volatile food and energy components, advanced 3.2% YoY, following a 3% rise in February and matching analysts’ forecasts.

Meanwhile, preliminary Gross Domestic Product (GDP) Annualized expanded by 2.0% in Q1 2026, falling short of the 2.3% market expectation but improving from the previous 0.5% growth.

On the Swiss side, the KOF Leading Indicator rose to 97.9 in April 2026 from 95.6 in March, beating the 95.9 forecast on gains in manufacturing, services, and consumption, data showed on Thursday.

Earlier this week, the ZEW Swiss Survey Expectations improved to -30.3 in April from -35.0 in March, a six-month low. More than half of respondents expect the outlook to remain stable over the next six months, while slightly over a third anticipate deterioration.

Swiss Franc FAQs

What key factors drive the Swiss Franc?

The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.

Why is the Swiss Franc considered a safe-haven currency?

The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.

How do decisions of the Swiss National Bank impact the Swiss Franc?

The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.

How does economic data influence the value of the Swiss Franc?

Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.

How does the Eurozone monetary policy affect the Swiss Franc?

As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.

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