Dollar Soars on Fed Rate Hike as Swiss Franc Faces Pressure
The US Dollar (USD) has strengthened against the Swiss Franc (CHF), reaching its highest level since July 30, due to the Federal Reserve's (Fed) hawkish rate hike at its September 15-16 policy meeting.
The Fed raised rates by 25 basis points (bps) for the first time in three years, citing stubborn inflation and higher energy prices linked to the war in the Middle East.
According to economists at DBS Group Research, the Swiss National Bank's (SNB) 0% policy rate leaves the CHF at a yield disadvantage against the USD.
The SNB is expected to announce its next policy decision on Thursday, with markets widely expecting rates to stay unchanged. However, economists caution that the central bank may raise its near-term inflation forecast due to elevated energy prices and persistent uncertainty in the Middle East.