USD/CHF traded near 0.7690 in early European trading on Monday, after opening above its previous close. The pair moved in a narrow range as the Swiss Franc stayed steady.
Swiss CPI inflation was 0.1% year on year in January, unchanged from December. This is at the lower end of the SNB’s 0%–2% price-stability range.
Swiss Inflation And SNB Signals
On a month-on-month basis, Swiss CPI fell 0.1%, compared with expectations of 0.0%. SNB President Martin Schlegel said the bank is willing to tolerate short periods of negative inflation, while staying focused on its medium-term goals.
Schlegel also said that low inflation and a 0% policy rate put the SNB in a tough spot. After the data, expectations for a dovish SNB stance were broadly unchanged.
USD/CHF could also come under pressure if the US Dollar weakens after softer US inflation data. US CPI rose 2.4% year on year in January, down from 2.7% in December and below the 2.5% forecast.
US CPI rose 0.2% month on month, down from 0.3% and below the 0.3% expectation. CME FedWatch shows close to a 90% chance of no change in March, up from about 83% a week earlier. Markets are pricing a 25-basis-point cut in June at around 50.5%.
Options And Forward Positioning
In early 2025, signs pointed to a more dovish Swiss National Bank as inflation hovered near zero. That pattern has mostly continued. The latest January 2026 CPI data from the Swiss Federal Statistical Office shows inflation at a muted 0.5% year over year. This reduces pressure on the SNB to tighten policy and helps keep the franc a low-yielding currency.
The SNB’s steady and predictable approach, a trend we followed through 2025, has also kept implied volatility in CHF pairs relatively low. In this kind of market, buying USD/CHF call options can be a capital-efficient way to position for further upside. With option premiums still relatively cheap, the risk-to-reward profile can be attractive if the pair moves higher in the coming weeks.
On the US side, the outlook has become more complicated than expected in early 2025. The Federal Reserve delivered two rate cuts in the second half of last year, but January 2026 US CPI came in hotter than expected at 2.8%. This “sticky” inflation has pushed traders to scale back expectations for more cuts, which supports the dollar.
This policy gap—between a dovish SNB and a more cautious Fed—supports a continued uptrend in USD/CHF. The pair has climbed from around 0.7700 last year to about 0.8100 today. Traders may consider defined-risk strategies such as a bull call spread. For example, buying a 0.8150 call and selling a 0.8300 call for the April expiry could be a lower-cost way to target a gradual rise.
Create your live VT Markets account and start trading now.
here to set up a live account on VT Markets now
