The USD/CHF pair rose slightly as the US Dollar found some support, now trading around 0.7940. This marks an end to its three-day decline. Swiss National Bank Chair Schlegel mentioned that potential negative inflation in 2026 is not a concern for the central bank. Market sentiment remains unstable due to trade conflicts and political risks in the US. Although tensions eased following Trump’s speech at Davos, his trade policies and actions concerning the Federal Reserve continue to pressure US assets.

Trump Critiques Fed Chair

Trump has criticized Fed Chair Jerome Powell regarding interest rates and may soon announce a new Fed chair. All eyes are on a US Supreme Court case linked to Trump’s efforts to remove Fed Governor Lisa Cook and on upcoming US economic data. The Swiss Franc is considered a safe-haven currency because of Switzerland’s stability. Its value is influenced by various factors, including economic health, market sentiment, and the actions of the Swiss National Bank (SNB). The SNB meets every three months to set policy, aiming to keep inflation below 2%. Economic reports and Eurozone policies also play a vital role in influencing the Swiss Franc. Switzerland’s economy is tightly connected to the Eurozone, leading to a strong correlation between the Swiss Franc and the Euro. Looking back to this time in 2025, the Swiss National Bank’s forecasts have become reality. SNB Chair Schlegel’s comments at Davos about accommodating negative inflation in 2026 have proven to be accurate. Data from December 2025 showed Swiss CPI declining to -0.1% year-over-year, confirming this trend.

Sell America Narrative

The “Sell America” narrative, which has been fueled by political turmoil in 2025, continues to put pressure on the US Dollar. Ongoing political uncertainty in Washington and previous pressures on the Federal Reserve have made long-term investors cautious, preventing any substantial rallies in the dollar against safe-haven currencies. This creates a challenging scenario for the Swiss Franc, which is being pulled in different directions. While the SNB’s dovish stance is expected to weaken the currency, ongoing global risk aversion keeps driving safe-haven interest. For derivative traders, this indicates that implied volatility in USD/CHF options may stay high, creating potential opportunities. With the current USD/CHF level around 0.7850, we see ongoing downside risks for the pair. Traders might consider buying put options to bet on further declines or using put spreads to reduce entry costs. The technical rebound from January’s lows around 0.7940 now feels like a distant memory. In the coming weeks, all eyes will be on the US jobs report and CPI data. Any hint of further weakness in the US economy could speed up the dollar’s decline. On the other hand, unexpectedly strong data might only provide temporary relief for the greenback. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now