Swiss Franc Dives Near One-Week Low Amid Hawkish Fed Outlook

The Swiss franc has fallen to its lowest level in nearly two weeks, trading near $0.81 due to increased demand for the US dollar.

Hawkish comments from Federal Reserve Chair Warsh have boosted market expectations of a September rate hike, supporting dollar-denominated assets.

Meanwhile, traders are shifting short positions from the yen to the Swiss franc, potentially weakening the currency further.

A survey by the Swiss Bankers Association found that all bankers expect the SNB to keep its policy rate at 0% by year-end, while 60% expect it to remain unchanged throughout 2027.

Markets now anticipate the first rate hike in June 2027, later than previous expectations, which could make the currency more attractive for carry trades.