Dollar Gains Against Franc as Interest Rate Differentials Favor Greenback

The US dollar gapped lower against the franc on Monday as tensions in the Middle East flared up, but Christopher Lewis of DailyForex expects this to be a short-lived move. According to Lewis, who has over two decades of trading experience, the interest rate differential between the US and Switzerland will continue to favor the dollar.

The USD/CHF pair rose significantly on Monday, tagging the 0.81 level before giving back its gains later in the day. Lewis believes that if the pair can break above the 0.8140 level, momentum could pick up, leading to a move beyond this price point.

With the Federal Reserve likely to remain tight and the Swiss National Bank keeping interest rates at 0%, Lewis expects the dollar to continue its upward trajectory against the franc. He notes that there have been no signs from Switzerland indicating a change in their interest rate policy, which he believes will remain in place for the foreseeable future.