USD/CHF Declines Near 13-Year Low Amid Deepening Trump-Powell Rift
Date: April 21, 2025
By: Christian Borjon Valencia
The USD/CHF currency pair has witnessed a continuous decline, extending its losses for three consecutive days as political tensions between US President Donald Trump and Federal Reserve Chair Jerome Powell escalate. This political instability has prompted investors to retreat from the US dollar, leading to a significant rise in the Swiss Franc.
Rising Concerns and Political Instability
Currently trading at approximately 0.8080, the USD/CHF has dropped 0.06% as a wave of safe-haven investments shifts in favor of the Swiss Franc. In the past eight trading days, the Franc has gained over 6%, a response to fears surrounding the independence of the US central bank following Trump’s vocal criticism of Powell. In his latest remarks, Trump criticized Powell as a "looser" and demanded immediate interest rate cuts, claiming that the Federal Reserve should follow the European Central Bank’s lead in reducing rates due to falling oil and grocery prices.
This political rhetoric has created an environment rife with uncertainty, prompting traders to pivot toward the more stable Swiss currency. Analysts have noted that the markets were previously focused on tariffs, but Powell’s recent statements indicating a hawkish stance—asserting that tariffs could potentially drive inflation—have further destabilized the situation.
Technical Analysis of USD/CHF
From a technical standpoint, the USD/CHF pair is at risk of a deeper decline if it breaches the critical support level of 0.8038 established earlier this month. If the pair falls below this mark, it may approach the 0.79 threshold, which has not been seen since September 2011. Conversely, for the USD/CHF to reverse its current downward trend, buyers must push prices back above the April 21 peak of 0.8163, with the next resistance level identified at 0.8267. The Relative Strength Index (RSI) indicates that the USD/CHF is currently oversold; however, its failure to surpass the recent peak suggests that selling pressure remains strong.
Market Overview
The Swiss Franc’s strong performance can be observed across various major currencies this week, with it showing notable strength against the New Zealand Dollar and slight gains against the US Dollar, Euro, and British Pound. Below is a summary of the percentage changes of the Swiss Franc against other major currencies:
- USD: -0.05%
- EUR: 0.05%
- GBP: 0.01%
- JPY: 0.08%
- CAD: 0.02%
- AUD: -0.03%
- NZD: -0.07%
- CHF: 0.12% (against itself, of course)
This uptick in the Franc reflects a broader market sentiment where investors seek safety amidst the ongoing geopolitical risks emanating from the U.S.
Conclusion
As the USD/CHF continues to edge towards a 13-year low, the combination of Trump’s aggressive rhetoric toward the Federal Reserve and a flight to safety amongst investors is influencing market movements substantially. Traders will be closely monitoring the unfolding situation, paying attention to potential responses from both the U.S. administration and the Federal Reserve regarding monetary policy changes amid these turbulent economic conditions.
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