USD/CHF drops to 0.8420 as SNB shows comfort with franc strength

USD/CHF has declined 0.7% (60 pips) to 0.8420 as the Swiss National Bank signals greater tolerance for franc appreciation amid persistent inflation concerns. SNB officials indicated less urgency for intervention, noting the franc's strength helps combat imported inflation, which remains elevated at 2.1%. The dollar's weakness stems from mounting Fed rate cut expectations, while the franc benefits from its traditional safe-haven status during uncertain times. EUR/CHF has also fallen to 0.9380, reflecting broad-based franc strength across major pairs. Technical analysis shows USD/CHF breaking below crucial support at 0.8450, opening the path toward 0.8380 and potentially 0.8350. The SNB's shifted stance marks a significant policy evolution, suggesting sustained franc strength ahead. Traders should monitor the 0.8500 level as key resistance, with any recovery attempts likely capped below this threshold given the fundamental backdrop.