Swiss National Bank official Petra Tschudin indicates readiness to cut rates below zero if inflation targets require it, weighing on CHF.
The USD/CHF pair recovered to 0.8013 on Friday after hitting a near-month low of 0.7949, though it remains poised for a weekly decline. The Swiss Franc weakened following dovish remarks from SNB Governing Board member Petra Tschudin, who suggested negative rates could be reintroduced to maintain inflation between 0% and 2% over the medium term.
The US Dollar Index (DXY) traded near 98.81, rebounding from an intraday low but still near a three-month trough, with a weekly loss of nearly 0.8%. Strong US PMI data—Composite at a 52-month high of 56.0 and Services at a 20-month peak of 56.8—provided limited support, while Manufacturing PMI dipped to 53.2.
Tschudin attributed the Franc’s weakness to higher interest-rate expectations abroad, reinforcing the SNB’s cautious stance. The US Treasury’s plan to double liquidity-support buybacks to $4 billion for longer-dated securities earlier this week had previously pressured the Greenback against G10 peers.