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USD/CHF holds gains near 0.7950 as expectations for a December Fed rate cut fade

The post USD/CHF holds gains near 0. 7950 as expectations for a December Fed rate cut fade appeared com. USD/CHF continues to gain ground for the second successive session, trading around 0. 7950 during the Asian hours on Monday. The pair appreciates as the US Dollar (USD) gains amid diminishing likelihood of a Federal Reserve (Fed) interest rate cut in December. Traders are preparing for a wave of delayed United States (US) economic data after the government’s reopening, looking for clearer signals on Federal Reserve (Fed) policy. The highly anticipated September Nonfarm Payrolls report is scheduled for release on November 20, with markets also awaiting a revised timeline for other key indicators. However, US National Economic Council Director Kevin Hassett cautioned last week that some October data may “never materialize,” as several agencies were unable to gather information during the shutdown. The CME FedWatch Tool suggests that financial markets are now pricing in a 46% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, down from 67% probability that markets priced a week ago. Kansas City Fed President Jeffery Schmid said on Friday that monetary policy should “lean against demand growth,” adding that current Fed policy is “modestly restrictive,” which he believes is appropriate. Moreover, St. Louis Fed President Alberto Musalem said Thursday that rates are now closer to neutral than restrictive and the US economy remains resilient. Musalem stressed the need for caution, noting there is limited room to ease without risking overly accommodative policy. The upside in the USD/CHF pair may be restrained as the Swiss Franc (CHF) could draw further support from growing expectations that the Swiss National Bank (SNB) will hold its policy rate at 0% in December amid forecasts of rising inflation. SNB officials have signaled confidence in an upward inflation trajectory, with Vice President Antoine Martin stating it is “expected to increase slightly.”.

admin November 16, 2025

USD/CHF Continues to Gain Ground Amid Diminishing Chances of Fed Rate Cut

The USD/CHF currency pair extended its upward momentum for the second consecutive session, trading around 0.7950 during Asian hours on Monday. This appreciation reflects a stronger US Dollar (USD), driven by a decreasing likelihood of a Federal Reserve (Fed) interest rate cut in December.

Market participants are gearing up for a wave of delayed US economic data releases following the government’s recent reopening, seeking clearer signals on the Fed’s monetary policy direction. One of the most anticipated reports is the September Nonfarm Payrolls, scheduled for release on November 20. In addition, markets await revised timelines for other key economic indicators.

However, US National Economic Council Director Kevin Hassett cautioned last week that some October data “may never materialize,” as several government agencies were unable to gather sufficient information during the shutdown.

Fed Rate Cut Probabilities Decline

According to the CME FedWatch Tool, financial markets have lowered the probability of a rate cut at the Fed’s December meeting. Currently, there is a 46% chance the Fed will reduce its benchmark overnight borrowing rate by 25 basis points (bps), down from a 67% probability observed just a week ago.

Kansas City Fed President Jeffery Schmid commented on Friday that monetary policy should “lean against demand growth,” describing current Fed policy as “modestly restrictive” and appropriate under current conditions. Meanwhile, St. Louis Fed President Alberto Musalem stated on Thursday that interest rates are now closer to neutral than restrictive, highlighting the resilience of the US economy. Musalem also urged caution, emphasizing limited room to ease policy without risking excessive accommodation.

Swiss Franc Gains Support Amid Inflation Forecasts and Trade Agreement

The upside potential for USD/CHF may face some resistance. The Swiss Franc (CHF) could receive further support as expectations grow that the Swiss National Bank (SNB) will maintain its policy rate at 0% in December, amid forecasts of rising inflation.

SNB officials have expressed confidence in an upward inflation trajectory. Vice President Antoine Martin noted that inflation is “expected to increase slightly,” reinforcing a cautious stance on monetary easing.

Additionally, the Swiss Franc strengthened following the Swiss government’s confirmation of a 15% tariff agreement with the Trump administration. This development provides relief to Switzerland, which had previously been subject to the highest tariff imposed on any developed nation.

In summary, while the USD gains on the back of faltering rate cut expectations and robust economic data anticipation, the Swiss Franc’s outlook buoyed by inflation trends and trade agreements may limit further gains in the USD/CHF pair. Traders should watch upcoming US economic releases and SNB announcements closely for fresh market direction.
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