The Swiss Franc (CHF) remained stable against the US Dollar (USD) on Tuesday as the Greenback surrendered its earlier gains, with investors adopting a cautious stance ahead of the US Federal Reserve’s monetary policy decision scheduled for Wednesday. At the time of writing, the USD/CHF pair was trading near 0.8184 after retreating from an intraday peak of 0.8205, the highest level recorded since June 2025.

The US Dollar came under pressure as crude Oil prices continued to decline following a pause in hostilities between the United States and Iran. Softer energy prices reduced immediate inflation concerns, prompting a decline in US Treasury yields and limiting support for the Greenback.

Adding to the geopolitical backdrop, US President Donald Trump stated that it was an appropriate time for Iran to reach an agreement but cautioned that the United States would resume military action if diplomatic efforts failed. Despite the comments, markets remained relatively calm, contributing to weaker demand for the US Dollar.

The US Dollar Index (DXY), which measures the currency against a basket of six major peers, eased to around 101.35 after touching a one-month high of 101.64 earlier in the session. Meanwhile, recent US economic data failed to provide meaningful support. The Conference Board reported that Consumer Confidence slipped to 90.8 in July from a revised reading of 92.2 in June, reflecting softer household sentiment.

Attention is now firmly on the Federal Reserve’s policy announcement. Markets broadly expect the central bank to keep the federal funds rate unchanged at 3.50%–3.75%, although CME FedWatch estimates indicate roughly a 30% probability of a 25-basis-point rate increase. Inflation remains above the Fed’s long-term target of 2%, meaning policymakers are likely to maintain a hawkish tone even if interest rates remain unchanged, a factor that could continue supporting the US Dollar.

On the Swiss side, the Franc has been one of the weaker major currencies since the US-Iran conflict intensified. The Swiss National Bank’s zero-interest-rate policy encourages carry trades, while the central bank’s willingness to curb excessive Franc appreciation, combined with broader US Dollar resilience, has continued to weigh on the Swiss currency.

Trade Idea:

Buy USD/CHF above 0.8205 with targets at 0.8245 and 0.8280, while placing a stop-loss below 0.8165. A hawkish Fed outlook could provide additional upside momentum.