USD/CHF remains stronger above 0.7900 due to Fed hawkish tone

USD/CHF extends its gains for the third consecutive day, trading around 0.7920 during the Asian hours on Thursday. The pair advances as the US Dollar (USD) rebounds from intraday losses, holding gains after the Federal Reserve (Fed) kept rates unchanged but struck a more hawkish tone amid rising inflation concerns.

Morgan Stanley had earlier projected two 25-basis-point Fed rate cuts in September and December, but has now shifted its outlook to expect no changes through year-end. The firm points to persistently elevated inflation and recent data indicating economic resilience as key reasons for the revision.

The Federal Open Market Committee (FOMC) voted 8-4 on Wednesday to keep interest rates unchanged within the 3.5%–3.75% range, marking the first instance of four dissenting votes since October 1992. The committee emphasized that “inflation remains elevated, partly due to the recent rise in global energy prices.”

The safe-haven demand also supports the Greenback against its major peers. US President Donald Trump said the naval blockade on Iran will continue until a nuclear deal is secured, dismissing calls to reopen key routes and favoring economic pressure over military action. Iran warned of retaliation, accusing Washington of using coercion and destabilization tactics to force compliance.

ZEW data released on Wednesday showed Swiss Survey Expectations improved to -30.3 in April from -35.0 in March, a six-month low. More than half of respondents expect the outlook to remain stable over the next six months, while slightly over a third anticipate deterioration. The March KOF Leading Indicator is due later in the day.