The US Dollar has given back earlier gains against the Swiss Franc, with USD/CHF staying in a roughly 70-pip range near 0.7900 on Monday. Attempts to rise have stalled below 0.7925-0.7930.
Peace talks between the US and Iran ended without an agreement last weekend. US President Donald Trump said he ordered the US military to block any vessel trying to enter or leave Iranian ports from Monday at 10:00 Easter time (14:00 GMT).
Strait Of Hormuz Tensions
Iran said the restrictions are illegal and described them as piracy. The Revolutionary Guard said foreign military vessels in Hormuz would be treated as a ceasefire breach and would be dealt with severely.
A two-week truce remains in place, leaving open the chance of more talks. This has limited the US Dollar’s ability to push higher.
The economic calendar is almost empty on Monday, so Iran-related updates are expected to drive trading. On Tuesday, the US Producer Price Index for March is due after last Friday’s US Consumer Prices Index (CPI), and could add pressure on the Federal Reserve to reverse its easing cycle.
We are seeing a market that is very different from the past. When we looked back from 2025, we remembered the period during the Trump administration when US-Iran tensions in the Strait of Hormuz dominated headlines. Those geopolitical flare-ups acted as a powerful anchor, keeping the US Dollar suppressed against safe-havens like the Swiss Franc.
Central Bank Policy Divergence
That dynamic kept USD/CHF trapped in tight ranges, such as the 0.7900 level mentioned in those old reports. Today, however, the pair is trading much higher, currently holding around 0.9120 as the market’s focus has completely shifted. Geopolitical risk has been replaced by the starkly different paths of central bank policy.
The main driver now is the divergence between the Federal Reserve and the Swiss National Bank. Data released in the first week of April 2026 showed US core inflation accelerating to 3.7%, putting immense pressure on the Fed to maintain its hawkish stance. In contrast, Swiss inflation, reported last week, cooled to just 1.4%, giving the SNB room to consider further rate cuts after its initial move last month.
This widening interest rate differential is creating a strong tailwind for the dollar against the franc. We believe this trend makes long-volatility strategies attractive in the coming weeks. Traders could consider buying at-the-money straddles on USD/CHF options to capitalize on a potential breakout from the current consolidation phase.
For those with a directional bias, the fundamental picture favors further dollar strength. Buying USD/CHF call options with a two-month expiry offers a defined-risk way to profit from a move towards the 0.9300 resistance level. This strategy positions for a continuation of the policy-driven trend we are currently witnessing.
