0.8150: Swiss Franc hits monthly lows as Fed hiking bets, risk aversion buoy US Dollar
- USD/CHF appreciates to one-month highs above 0.8150, posting a 0.9% rally in the last two days.
- Risk aversion and Fed-SNB monetary policy divergence are boosting the US Dollar.
- Technical indicators show the pair reaching strongly overbought levels on intraday charts.
The Swiss Franc (CHF) extends its decline against a stronger US Dollar (USD) on Wednesday, and is nearly 0.9% down in the last two days. A mix of risk aversion, amid fresh tensions in the Middle East and rising hopes of Federal Reserve (Fed) tightening, is buoying the US Dollar across the board and sending the USD/CHF pair to levels above 0.8150 for the first time since late July.
The US military launched a wave of strikes on Islamic Revolutionary Guard Corps (IRGC) targets across Iran on Tuesday, and Tehran retaliated with attacks on US bases in Bahrain and Jordan in the worst episode of tension since the hostilities stopped in late July.
Beyond that, markets maintain their bets on a Fed rate hike at the September 16 monetary policy meeting, following hawkish comments by Chairman Kevin Warsh at the Jackson Hole summit on Friday. The Swiss National Bank (SNB), in contrast, is expected to leave its benchmark interest rate on hold at 0% on September 24, and most likely, for the rest of the year.
Technical Analysis: The pair reaches overbought levels
The USD/CHF accelerated its rally this week, confirming the bullish trend, although the strongly overbought levels on intraday charts suggest that the pair might be ripe for some consolidation or even a bearish correction. The 4-hour Relative Strength Index (14) has reached levels beyond 80, while the Moving Average Convergence Divergence (MACD) histogram remains mildly positive, altogether hinting at a strong but potentially stretched upside momentum.
If the pair confirms above mid-August highs at the 0.8145 area, the next upside targets are the July 30 high, at 0.8175, and the year-to-date high, at 0.8207. A bearish reaction below 0.8145, on the contrary, would bring Tuesday's high, near 0.8125, back to the focus. Below here, the next support area comes at the August 31 low near 0.8070.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.21% | 0.28% | -0.19% | 0.28% | 0.26% | 1.39% | 0.46% | |
| EUR | -0.21% | 0.05% | -0.41% | 0.08% | 0.05% | 1.15% | 0.24% | |
| GBP | -0.28% | -0.05% | -0.45% | 0.00% | -0.02% | 1.06% | 0.18% | |
| JPY | 0.19% | 0.41% | 0.45% | 0.46% | 0.44% | 1.54% | 0.63% | |
| CAD | -0.28% | -0.08% | -0.01% | -0.46% | -0.03% | 1.07% | 0.17% | |
| AUD | -0.26% | -0.05% | 0.02% | -0.44% | 0.03% | 1.10% | 0.21% | |
| NZD | -1.39% | -1.15% | -1.06% | -1.54% | -1.07% | -1.10% | -0.88% | |
| CHF | -0.46% | -0.24% | -0.18% | -0.63% | -0.17% | -0.21% | 0.88% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
