US-China Trade Updates

The Federal Reserve is taking a cautious approach, unlike the Swiss National Bank (SNB), which is more relaxed. This difference is helping the USD/CHF exchange rate rise as the market awaits more information from the Fed. The US Dollar is performing differently against major currencies, showing its strongest value against the New Zealand Dollar. Market Analyst Ghiles Guezout provides insights, but it’s important to note that this analysis is for informational purposes only and not investment advice. Bitcoin has evolved over 17 years, shifting from digital cash to a more institutional investment. Remember, all markets carry risks, so thorough research is essential, and neither FXStreet nor the author is giving specific investment advice. Looking back, there were times when the Federal Reserve lowered rates to about 4.00%, creating a cautious but supportive environment for the US dollar. Today, on October 31, 2025, the situation is different, with the Fed keeping its funds rate at 4.50%. This helps explain why USD/CHF is trading around 0.9100, much higher than the 0.8030 levels from earlier.

The Federal Reserve’s Current Caution

The Federal Reserve’s current cautious stance is influenced by persistent core inflation, which the latest Consumer Price Index (CPI) report shows is around 3.1%. This means we might not see more rate cuts soon, which supports strategies benefitting from a strong dollar. The benchmark 10-year Treasury yield is now at 4.35%, encouraging investors to hold US assets. In contrast, the Swiss National Bank (SNB) remains one of the most cautious central banks, similar to past years. With Swiss inflation at a low 1.4%, the SNB sees no need to raise its policy rate of 1.25%. This makes selling call options on the Swiss Franc an appealing strategy for the weeks ahead. Given the significant difference in interest rates, we expect USD/CHF to trend upward. Traders could consider buying at-the-money call options on USD/CHF that expire in late December to take advantage of ongoing dollar strength. Additionally, selling cash-secured puts on this pair could provide income while offering a lower entry point. Create your live VT Markets account and start trading now.

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