• USD/CHF drops 0.35% to 0.8070, pressured by renewed risk aversion.
• Speaker Johnson’s pessimistic comments on the US shutdown weigh on the US Dollar.
• The Swiss National Bank’s remarks reinforce confidence in inflation resilience.

USD/CHF weakens on Thursday, down 0.35% around 0.8070 at the time of writing. Risk-off sentiment dominates the markets, supporting demand for safe-haven assets such as the Swiss Franc (CHF), while US political uncertainty continues to weigh on the US Dollar (USD). According to Reuters, US House Speaker Mike Johnson said he is “less optimistic” about an imminent end to the government shutdown, deepening fears over its potential economic fallout.

This fragile political backdrop adds to mixed economic signals from the United States (US). October’s ADP Employment Change and Institute for Supply Management’s (ISM) Services Purchasing Managers Index (PMI) released earlier in the week beat expectations, but the US Dollar has gained little support.

Markets appear more focused on the deteriorating global outlook and on cautious comments from Federal Reserve (Fed) officials. Fed of Cleveland President Beth Hammack stated that it would take “two to three years” to bring inflation back to the 2% target, emphasizing the need to keep policy “modestly restrictive” to lower inflation.

On the Swiss side, the Swiss National Bank (SNB) maintains a confident tone regarding inflation prospects. Chair Martin Schlegel reiterated this week that prices should rise slightly in the coming quarters and that interest rates are expected to remain stable for an extended period. This message, combined with a resilient labor market, as with Switzerland’s unemployment rate steady at 3% in October, reinforces the Franc’s credibility as a safe-haven currency amid global uncertainty.

Against this backdrop of mounting US political risks and steady Swiss policy, the USD/CHF pair remains under pressure, consolidating below the 0.8100 mark after reaching an eleven-week high earlier in the week.