USD/CHF traded in a tight range on Monday. It held near 0.7738 and was down 0.16%. The Swiss franc weakened after softer Swiss data, but a weaker US dollar limited further moves.
The US dollar slipped after President Donald Trump announced a 15% global tariff. The move came after a US Supreme Court ruling that his use of the International Emergency Economic Powers Act (IEEPA) to impose broad tariffs was unlawful.
Trade Deal Frictions
The European Parliament has reportedly paused ratification of a US‑EU trade deal. India has also delayed talks on an interim trade agreement with Washington.
The US Dollar Index (DXY) hovered near 97.67 after hitting an intraday low around 97.35. US Factory Orders fell 0.7% month-on-month in December, missing expectations for a 1.1% increase, after a prior 2.7% gain.
Fed Governor Christopher Waller backed a 25 basis point rate cut at the January meeting. In Switzerland, Producer and Import Prices fell 0.2% month-on-month in January versus forecasts for a 0.1% rise. They were down 2.2% year-on-year, following a 1.8% decline in December.
Key US events ahead include ADP Employment Change and Conference Board Consumer Confidence on Tuesday, Trump’s State of the Union on Wednesday, Initial Jobless Claims on Thursday, and January PPI on Friday.
From 2025 Turbulence To 2026 Divergence
In early 2025, USD/CHF was stuck in a narrow band near 0.7738. The main drivers were uncertainty around the Trump administration’s surprise tariffs and a weaker Swiss franc. Markets were waiting for clearer signals from economic data and US policy.
That backdrop has changed. By February 2026, the bigger driver is policy divergence between the US Federal Reserve and the Swiss National Bank. Trade risks are still present, but they feel more structured and less sudden than the tariff headlines of 2025.
In Switzerland, the deflation pressure seen in 2025 has eased a little. January 2026 data showed Swiss CPI inflation at 1.4% year-on-year. Inflation is still low, but it is no longer near the negative producer-price readings from last year. This offers some support to the franc, but not enough to push the SNB toward a policy shift.
In the US, the labor-market worries raised by Fed officials in early 2025 did not turn into a major downturn. The latest January 2026 jobs report showed payrolls rising by 195,000, with unemployment steady at 3.7%. This resilience has helped the Fed keep rates in the 3.50%–3.75% range.
The large rate gap between the US and Switzerland makes the US dollar more attractive than the Swiss franc. Derivatives traders should also note that implied volatility has dropped from the highs seen during the 2025 trade turmoil. Lower volatility generally makes options cheaper than they were a year ago.
As a result, traders may look at strategies that benefit from the rate gap and the calmer macro backdrop. One approach is selling out-of-the-money USD/CHF puts to collect premium, assuming downside is limited by the policy split. Another is using call options or call spreads to position for more upside if US data stays strong.
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