USD/CHF eases from daily highs, holds 0.7860 following comments by SNB Schlegel

The US Dollar (USD) maintains a near-term bullish trend against the Swiss Franc (CHF), but the pair eased from 10-day highs of 0.7875 on Friday to levels close to 0.7860, as the President of the Swiss National Bank (SNB), Martin Schlegel, hinted at changes in the bank’s monetary policy.

Schlegel observed the negative impact of the conflict in the Middle East on the Swiss economy at the SNB’s General meeting earlier on Friday and affirmed that the central bank is ready to adjust its monetary policy if needed and that it has a “higher willingness" to intervene in FX markets.

Middle East war will weigh on economic growth

The Swiss Central Bank president assessed that the war in the Middle East is likely to weigh on the economic growth this year, but that he expects a certain recovery next year. Regarding inflation, Schlegel noted that prices will remain “a little higher” in the coming months, but practically unchanged in the mid-term.

These comments seem to have soothed investors, providing some support to the Swissie, which has depreciated about 0.6% this week, as hopes of a resolution of the Middle East conflict wane, and Oil prices escalate with the Strait of Hormuz closed for already eight weeks.

In the US, economic data were USD-supportive on Thursday. Preliminary S&P Global Purchasing Managers' Index (PMI) data for April showed robust economic activity, and jobless claims confirmed that the labour market remains steady despite last week’s uptick. On Friday, all eyes will be on the press conference of US Defense Secretary Pete Hegseth and the chair of the Joint Chiefs of Staff, Dan Caine, regarding the Operation Epic Fury in Iran, due at 13:00 GMT.