Swiss Franc strengthens as US Dollar Sinks on renewed pressure against Fed Chair Powell

• USD/CHF extends its decline on Monday trading below the 0.8000 psychological level on Monday.
• Political pressure on Fed Chair Jerome Powell intensifies after DOJ referral over alleged perjury.
• SNB sight deposits jump by CHF 11.2 billion, triggering speculation but likely due to routine liquidity shifts.

The Swiss Franc (CHF) is gaining ground against the US Dollar (USD) for the second day in a row. The USD/CHF pair slipped below the 0.8000 mark earlier on Monday as the Greenback, already weighed down by US President Donald Trump’s renewed trade threats, came under more pressure from growing political attacks on Federal Reserve (Fed) Chair Jerome Powell.

At the time of writing, the USD/CHF pair is trading around 0.7980 during American trading hours. Meanwhile, the US Dollar Index (DXY) is down over 0.70% on the day, hovering around 97.80

Concerns over the Fed’s independence have intensified after Rep. Anna Paulina Luna (R-Fla.) formally referred Chair Jerome Powell to the Department of Justice (DOJ) for criminal charges, accusing him of two specific instances of lying under oath during his congressional testimony about the Federal Reserve’s $2.5 billion headquarters renovation. While legal consequences remain uncertain, the political overhang is fueling investor jitters and adding a fresh layer of uncertainty to an already fragile market sentiment. The timing is particularly sensitive, as markets continue to grapple with mixed signals from Fed officials regarding a potential July interest rate cut and lingering doubts about the central bank’s ability to operate free from political interference.

Earlier in the day, speaking on CNBC, US Treasury Secretary Scott Bessent launched a sharp critique of the Fed, stating that it’s time to “examine the entire institution and whether they’ve been successful.” His remarks added to growing unease about potential political pressure on the Fed, denting confidence in its independence and casting uncertainty over the monetary policy outlook. Bessent went further, pushing back against the Fed’s inflation warnings. “They’re fearmongering over tariffs,” he said, insisting inflation remains under control.

Meanwhile, Swiss fundamentals continue to support the Franc's strength. A Reuters report on July 21, 2025, indicated that commercial banks deposited CHF 11.2 billion more in overnight balances with the SNB last week, raising total sight deposits to their highest level since April 2024. While this has triggered speculation about potential FX intervention, analysts widely believe the increase stems from routine liquidity operations, such as maturing SNB bills and decreased repo activity, rather than the central bank actively buying or selling currencies in the market.