USD/CHF Price Forecast: Sees more downside to near 0.7830
- USD/CHF falls further to near 0.7830 amid weakness in the US Dollar.
- The Greenback underperforms despite strong US Q3 GDP data.
- The Swiss Franc trades higher in a holiday-shortened week.
The USD/CHF pair extends its losing streak for the third trading day on Wednesday. The Swiss Franc pair posts a fresh three-month low at 0.7860 during the European trading session as the US Dollar (USD) continues to underperform its peers despite surprisingly upbeat United States (US) Q3 Gross Domestic Product (GDP) data.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.63% | -0.93% | -1.12% | -0.88% | -1.51% | -1.75% | -0.99% | |
| EUR | 0.63% | -0.30% | -0.51% | -0.26% | -0.89% | -1.12% | -0.36% | |
| GBP | 0.93% | 0.30% | -0.13% | 0.04% | -0.60% | -0.83% | -0.06% | |
| JPY | 1.12% | 0.51% | 0.13% | 0.28% | -0.34% | -0.58% | 0.05% | |
| CAD | 0.88% | 0.26% | -0.04% | -0.28% | -0.55% | -0.87% | -0.10% | |
| AUD | 1.51% | 0.89% | 0.60% | 0.34% | 0.55% | 0.06% | 0.54% | |
| NZD | 1.75% | 1.12% | 0.83% | 0.58% | 0.87% | -0.06% | 0.78% | |
| CHF | 0.99% | 0.36% | 0.06% | -0.05% | 0.10% | -0.54% | -0.78% |
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).
At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades close to the three-month low of 97.75 posted during the day.
The data showed on Tuesday that the US economy grew strongly at an annualized pace of 4.3%. Economists expected the GDP growth to come in lower at 3.3% from 3.8% seen in the second quarter this year.
The US Dollar has remained under pressure due to firm expectations that the Federal Reserve (Fed) will deliver more than one interest rate cut, as projected by officials in the monetary policy announced last week.
Meanwhile, the Swiss Franc (CHF) trades higher against its major peers ahead of Christmas Eve.
USD/CHF technical analysis
USD/CHF trades lower to near 0.7860. It extends its slide below a declining 20-day Exponential Moving Average (EMA) at 0.7966, with the average turning lower and capping rebounds. The bearish alignment continues to put pressure on the pair.
The 14-day Relative Strength Index (RSI) at 31 (near oversold) confirms weak momentum.
Bearish momentum would persist while price remains beneath the 20-day EMA, and a daily close below the September 17 low of 0.7830 would elevate downside pressure.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.