Swiss National Bank Policy Rate

The Swiss National Bank keeps its policy rate at 0%, stating that inflation pressures are under control for the medium term. The Swiss ZEW Survey for December dropped to 6.2 from 12.2, showing cautious economic outlook without the need for immediate policy changes. In the US, the Dollar is facing pressure as markets expect more Federal Reserve rate cuts by 2026. This is leading to weakness in USD/CHF. Policymakers have different opinions on recession risks and the need for monetary easing. Treasury Secretary Bessent has hinted at possible changes in Fed communication strategies, which adds to uncertainty around the Dollar. Traders are looking for US economic data, like GDP and Employment Change, to influence USD/CHF. The US Dollar Index is down 0.37%, nearing an 11-week low. The Swiss Franc is performing strongly against the US Dollar compared to other major currencies. The difference in central bank policies is becoming clearer, presenting an opportunity in currency markets. The Federal Reserve seems ready to ease, while the Swiss National Bank is staying steady. The CME FedWatch Tool shows that markets now expect more than a 75% chance of a rate cut by the March 2026 meeting.

Forex Trading Strategies

This pressure is likely to push the USD/CHF pair lower in the coming weeks. The recent dip below 0.7900 is notable, and further weakness is supported by new US data showing November 2025’s core CPI cooling to 3.1%. We believe a target of 0.7750, a key support level from early 2024, is reasonable. For derivative traders, buying USD/CHF put options that expire in February 2026 is a simple way to bet on this expected decline. A bear put spread—buying a higher-strike put and selling a lower-strike one—could also reduce initial costs. This strategy is smart, especially as the holiday period approaches when liquidity can be unpredictable. Implied volatility in USD/CHF has increased, with one-month options showing an annualized volatility of about 8.5%. This suggests the market is preparing for movement but also allows for selling out-of-the-money call options to generate income for those who are strongly bearish. However, this approach carries risks if US data surprises positively. The Swiss Franc’s position looks strong, adding confidence to this trade. The SNB’s commitment to its 0% policy rate offers a stable foundation for the franc. Additionally, November 2025 data revealed that the SNB’s foreign exchange reserves remained steady, indicating they are not trying to weaken their currency actively. Create your live VT Markets account and start trading now.

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