The Swiss franc climbed to a record low against the dollar on Wednesday after the U.S. Treasury announced plans to nearly double its purchases of long-dated government bonds, a move aimed at suppressing long-term borrowing costs.
The intervention, led by Treasury adviser Scott Bessent, is intended to reduce the supply of Treasuries in the market and drive down yields, easing financing costs for corporations and the federal government. The announcement coincided with a sharp drop in the dollar, which fell from 0.8123 to 0.7973 francs last week before staging a partial rebound above the 0.80 mark. Analysts warn the downward pressure on the U.S. currency may persist.
Union Bancaire Privée (UBP), a Geneva-based private bank, now expects the dollar to weaken further against the Swiss franc in the coming quarters, forecasting a decline from the current 0.80 level to 0.75 by early 2027. That would mark a new record low for the dollar against the franc, surpassing the 0.7610 level reached in January 2025.
The bank cited the Treasury’s bond-buying program as a signal of growing concerns over rising long-term U.S. interest rates and the country’s expanding fiscal burden, which surpassed $40 trillion last week. UBP described the move as potentially a form of financial repression, adding to headwinds for the dollar.
Market expectations for U.S. interest-rate hikes have also diminished. With inflation easing and economic activity softening, traders now price in only a 25-basis-point increase in the federal funds rate by early 2027, down from earlier projections of more aggressive tightening.
UBP additionally expects the U.S. Dollar Index (DXY) to trade within a 96–100 range, compared with Wednesday’s intraday range of 98.86 to 99.12. The franc’s appreciation reflects broader skepticism toward the dollar’s outlook amid concerns over U.S. debt sustainability and reduced expectations for monetary tightening.
