USD/CHF: Dollar-franc buoyant above 0.80000, although further downside possible

[Redator]

Painting new lows last Friday, gains in today’s session keep the dollar-franc exchange above the key level of 0.8000 - at least for now.

Currently trading around ~$0.80698, recent developments on the Federal Reserve’s autonomy on monetary policy and potential action by the SNB continue to dominate USD/CHF headlines.

USD/CHF: Key takeaways from today’s session

• Boasting reasonable gains in Monday’s session, despite a public holiday in the United Kingdom, USD/CHF trades ~0.46% higher today, as markets adjust expectations for Federal Reserve monetary policy
  
• Otherwise, questions continue surrounding Federal Reserve independence from the US central government, with President Trump attempting to fire board governor Lisa Cook
• Having reminded markets that intervention remains a real possibility, the SNB remains poised to take action should the franc stage a runaway strengthening versus the dollar

USD/CHF: Dovish fed commentary at Jackson Hole spells trouble for US dollar

Put simply, markets are increasingly certain of a September rate cut, in no small part because of dovish Federal Reserve commentary during last week’s Jackson Hole Symposium.

"With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance"

Jerome Powell speaking at the JHS, August 22nd, federalreserve.gov

While markets have consistently predicted Fed rate cuts in the remainder of 2025, confirmation from Jerome Powell himself now have markets overwhelmingly predicting a rate cut of 25 BPS in the upcoming decisions September 17th.

CME FedWatch, 26/08/2025

As for USD/CHF pricing, markets would do well to acknowledge how much the dollar has fallen versus the franc this year despite the Federal Reserve's best efforts to tighten monetary policy, especially when compared to the SNB.

As such, any suggestion that the Federal Reserve will lower rates will negatively affect the dollar and introduce selling pressure in USD/CHF markets, a phenomenon seen just last Friday.

Read more on Jackson Hole: Markets go wild from the Jackson Hole Symposium – Market wrap for the North American session - August 22

USD/CHF: Dollar finds support as Trump firing bid meets a dead-end

While building anonymity between the Republican party and the Federal Reserve is not a hot topic, the latest developments are perhaps the most significant for dollar-franc markets.

@realDonaldTrump, TruthSocial, 25/08/2025

Sharing the above letter yesterday on his social media platform of choice, TruthSocial, President Trump has made his intentions to fire Governor Cook clear, citing alleged mortgage fraud.

While matters of fraud amongst government officials would not typically be of such interest to financial markets, the move reignites discussion whether any US government should have the power to fire Federal Reserve officials, considering political independence is a core tenet of the institution.

Supposing Trump successfully removes Cook from office and overcomes various legal hurdles, an interesting precedent will be set, especially considering that Trump has been clear in his dislike for Powell and his policy of higher interest rates.

Regarding USD/CHF price action, any developments suggesting that Trump can wrangle more control of the Federal Reserve and its employees and, therefore, appoint governors who favour an aggressive lowering of interest rates will likely introduce some dollar-franc selling pressure.

As such, the next few days remain crucial, especially with USD/CHF hovering around the key level of 0.80000.

USD/CHF: SNB ready to intervene to halt CHF strengthening

Having already strengthened significantly compared to the dollar in the first half of the year, the trusted tool of currency intervention by the SNB remains a real possibility should dollar-franc continue to its decent.

Already trading around multi-year lows and citing the competitiveness of imports, USD/CHF downside may be capped in the near-term, considering the SNB’s clear commitment to intervention where appropriate.

USD/CHF, OANDA, TradingView, 27/08/2025

Read more analysis from today: Markets Today: Trump Slaps 50% Tariff on India, Australian Inflation Surge, FTSE Eyes Head & Shoulder Pattern. NVIDIA Earnings Later

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