USD/CHF is trading slightly higher on Friday near 0.8060, up about 0.15%, and is set to finish the week in positive territory. The pair’s strength mainly comes from the continued pressure on the US Dollar, as markets stay focused on the likelihood of upcoming Federal Reserve rate cuts.

Even with a small bounce on Friday helped by firmer US Treasury yields, the US Dollar Index is still heading for its weakest week since July. Traders have been steadily increasing their expectations for policy easing over the coming year. The CME FedWatch tool now shows an 85 percent chance of a 25-basis-point cut in December, a sharp jump from the less than 40 percent probability seen a month ago.

These expectations grew stronger after softer-than-expected US retail sales and a series of dovish comments from Fed officials. There is also speculation inside the National Economic Council that Kevin Hassett could replace Jerome Powell in May, which adds to the view that rate cuts could continue well into 2026. With this backdrop, any short-term Dollar rebound is likely to stay limited unless economic data takes a clear turn.

On the Swiss side, the Franc has been lacking support after weak economic figures. Switzerland’s GDP fell 0.5 percent in the third quarter, worse than the forecast, and last quarter’s numbers were revised lower. Year-on-year growth also slowed sharply to 0.5 percent. The only slight improvement came from the KOF Leading Indicator, which inched higher to 101.7, but overall the data points to a cooling economy. Analysts now think the Swiss National Bank may keep rates at zero possibly through 2027.

With the US still expected to ease sooner than the SNB, the broader setup continues to lean in favour of USD/CHF gains, though the pair will react quickly to shifts in Fed expectations.

Trade Idea:
Look for buying opportunities on dips above 0.8000, targeting gradual upside toward 0.8130–0.8180, while keeping stops tight in case Fed sentiment turns unexpectedly hawkish.