The USD/CHF pair holds its gains near the monthly high of 0.8000 during the late Asian trading session on Thursday. The Swiss Franc pair is trading strongly as the US dollar continues to outperform amid expectations that the Federal Reserve will pause its monetary easing cycle this month.
At press time, the US Dollar Index (DXY), which tracks the value of the dollar against six major currencies, had risen to approximately 99.17. The DXY index is approaching the monthly high of 99.26 hit last week.
US dollar price last 7 days
The table below shows the percentage change in the US Dollar (USD) against the major currencies listed in the last 7 days. The US dollar was the strongest against the Japanese yen.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | 0.36% | 0.26% | 1.11% | 0.33% | 0.67% | 0.68% | 0.41% | |
| euro | -0.36% | -0.10% | 0.76% | -0.01% | 0.31% | 0.32% | 0.05% | |
| GBP | -0.26% | 0.10% | 0.87% | 0.08% | 0.41% | 0.42% | 0.15% | |
| JPY | -1.11% | -0.76% | -0.87% | -0.78% | -0.43% | -0.45% | -0.69% | |
| Canadian | -0.33% | 0.01% | -0.08% | 0.78% | 0.36% | 0.35% | 0.10% | |
| Australian dollar | -0.67% | -0.31% | -0.41% | 0.43% | -0.36% | 0.01% | -0.26% | |
| New Zealand dollar | -0.68% | -0.32% | -0.42% | 0.45% | -0.35% | -0.01% | -0.27% | |
| Swiss franc | -0.41% | -0.05% | -0.15% | 0.69% | -0.10% | 0.26% | 0.27% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select USD 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).
According to the CME FedWatch tool, the Fed is certain to leave interest rates unchanged in the 3.50%-3.75% range at its January policy meeting. In the last three policy meetings, the Fed has made three 25 basis point rate cuts amid weak labor market conditions.
Speculation that the Federal Reserve will keep interest rates steady this month has intensified, following the release of US CPI data for December. The CPI report showed that price pressures remained steady.
In addition, the White House’s imposition of 25% tariffs on imports of some advanced computing chips, which include Nvidia’s H200 AI processor and a similar semiconductor from AMD called the MI325X, also improved the appeal of the US dollar.
Meanwhile, the Swiss Franc (CHF) is trading broadly calm as the Swiss National Bank (SNB) is unlikely to make any adjustment in its current monetary policy stance. The Swiss National Bank kept interest rates at 0%, as inflation in the Swiss region remained low. The SNB also continues to raise hopes for negative interest rates, noting that an overly cautious stance would be unfavorable for depositors and pensioners.
Frequently asked questions for central banks
Central banks have the main task of ensuring that prices in a country or region are stable. Economies constantly experience inflation or deflation when the prices of certain goods and services fluctuate. A continuous rise in prices for the same goods means inflation, and a continuous fall in prices for the same goods means deflation. It is the responsibility of the central bank to maintain demand by adjusting the interest rate. For the largest central banks such as the US Federal Reserve (Fed), the European Central Bank (ECB), or the Bank of England (BoE), the mandate is to keep inflation near 2%.
The central bank has one important tool at its disposal to raise or lower inflation, and that is by adjusting its benchmark interest rate, known as the interest rate. At the moments announced in advance, the central bank will issue a statement on its interest rate and provide additional reasons as to why it will remain or change (lower or raise). Local banks will adjust their savings and lending rates accordingly, which will make it harder or easier for people to earn their savings or for companies to get loans and make investments in their businesses. When a central bank raises interest rates significantly, this is called monetary tightening. When the benchmark interest rate is lowered, it is called monetary easing.
The central bank is often politically independent. Members of the central bank’s policy board go through a series of committees and hearings before being appointed to a policy board seat. Each member of this board often has a certain conviction about how the central bank should control inflation and subsequent monetary policy. Members who want very loose monetary policy, with low interest rates and cheap lending, to boost the economy significantly while being content to see inflation just above 2%, are called “doves.” Members who want to see higher interest rates to reward savings and want to keep inflation down at all times are called “hawks” and will not rest until inflation reaches 2% or just below.
Typically, there is a chair or chair who presides over each meeting, needs to create consensus among the hawks or doves, and has the final say when it comes to dividing the votes to avoid a 50-50 tie on whether the current policy should be amended. The Chairman will often make live follow-up speeches, communicating the current cash position and outlook. The central bank will try to push its monetary policy forward without causing violent fluctuations in interest rates, stocks, or its currency. All central bank members will direct their stance towards the markets before the policy meeting. A few days before the policy meeting and until the new policy is announced, members are prohibited from speaking publicly. This is called a blackout period.
