USD/CHF fell to around 0.7725 in early European trading on Monday, dropping below 0.7750 as the Swiss Franc strengthened. The move followed a weaker US Dollar, driven by uncertainty over US tariff policy.
On Friday, the US Supreme Court struck down President Donald Trump’s reciprocal tariffs. Trump then said he plans a new 15% global import tariff, which raised fears of another trade conflict.
Safe Haven Demand Lifts Swiss Franc
Markets are also watching rising US-Iran tensions, which are boosting demand for the Swiss Franc as a safe-haven currency. The New York Times reported on Sunday that Trump is considering limited airstrikes against Iran.
Trump said a bigger attack could be considered in the coming months if diplomacy—or any initial action—fails to persuade Iran to abandon its nuclear programme. The US and Iran are set to hold their next talks in Geneva on Thursday.
Traders are also preparing for the US January Producer Price Index report on Friday. If the number comes in above expectations, it could lower hopes for Federal Reserve rate cuts and support the US Dollar.
The story was corrected on 23 February at 6:35 GMT to clarify that US-Iran tensions support the Swiss Franc and put pressure on USD/CHF.
Tariff Uncertainty And Market Volatility
Uncertainty over global tariffs is once again creating conditions that usually support the Swiss Franc against the US Dollar. Risk-off sentiment is building, similar to what markets saw during the trade disputes in the years leading up to 2025. This suggests USD/CHF could face more downside pressure.
This backdrop can also lift implied volatility, which makes options more attractive. With the VIX—often used as a gauge of market fear—recently rising to 21 from 18, buying USD/CHF put options may offer a direct way to benefit if the pair falls further. These positions can also help protect against sudden drops triggered by unexpected geopolitical headlines.
The Swiss Franc is also gaining support from ongoing tensions in the South China Sea. In periods of global stress, money often moves into Switzerland, and that pattern has appeared many times before. Switzerland’s political and economic stability stands out at a time when policy remains uncertain elsewhere.
Different inflation trends are another factor. US inflation is still firm at 3.1%, while Swiss inflation has cooled to 1.5%. This leaves the Federal Reserve with a harder job, while the Swiss National Bank has more room to act. That difference supports a stronger Franc versus the Dollar.
Traders are now looking ahead to the next US jobs report and the next round of trade talks. Any sign of a weaker US labour market or stronger trade rhetoric could speed up a fall in USD/CHF. Short-dated options that expire after these key events may be a practical way to trade the expected price swings.
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