Trading at lows not seen since 2022, it would appear that markets are not entirely comfortable with the current position of the dollar.
While there is no secret that 2025 has been a poor year for dollar performance, recent upside has been coined a ‘repricing trade’ by some, suggesting a level of technical buying from multi-year lows.
Simultaneously, we’ve seen other major currencies weaken, particularly the Japanese yen, with the new dovish leadership allowing the DXY to strengthen somewhat.
As ever, let’s discuss some of the major fundamental themes to consider when trading USD/CHF currently:
High interest rates: Put simply, the United States offers the highest interest rates available across all G10 countries. While this is just one piece of the currency puzzle, higher rates in comparison to other currencies attract global interest, offering a significant carry advantage – especially in the case of USD/CHF.
Technical buying: As a personal anecdote, I once knew a trader who would only ever buy the dollar when trading FX. Case in point, markets are not accustomed to a weak dollar, especially over the last decade or so. As such, and in line with other technical analysis principles, some view current dollar pricing as an opportunity to get long.
Flight to liquidity: While logically, a US government shutdown would bode poorly for the greenback, this has proven true in recent sessions. Although confidence in the US government has been somewhat undermined, a flight to global liquidity in an effort to balance currency risk is bolstering USD gains. This phenomenon is relatively unique to the dollar, owing to its status as the world’s #1 reserve currency.
