USD/CHF traded flat near 0.7812 in late Asian trading on Wednesday. It remained close to its monthly low of 0.7790 set the previous day, with scope for more downside below 0.7800.
The US Dollar underperformed against peers amid optimism that the US and Iran could agree a permanent ceasefire soon. The US Dollar Index (DXY) edged up to about 98.15 but stayed near its almost seven-week low of 98.00.
US President Donald Trump told Fox Business that the conflict with Iran was “very close” to ending. He also told The New York Post on Tuesday that negotiations could resume in Pakistan within the next two days.
US Vice President JD Vance said talks with Iran were taking place through channels including Pakistan and would continue. He said both sides were working towards a deal.
Market pricing no longer includes Federal Reserve interest rate hikes this year. This compares with expectations for two hikes in March after the war started.
Looking back at the sentiment in 2025, we saw a strong case for USD/CHF downside based on hopes for a US-Iran ceasefire. That optimism drove expectations for a weaker dollar and shifted views on Federal Reserve policy. The focus was on the pair breaking below the 0.7800 level.
The situation today, in April 2026, has completely reversed course. The most significant development has been the Swiss National Bank (SNB) unexpectedly cutting its key interest rate to 1.50% in March, making it the first major central bank to ease policy. This policy divergence now strongly favors the US dollar over the Swiss franc.
Instead of testing lows, the USD/CHF is currently trading firmly above 0.9100, a level not seen in many months. US inflation data has also remained persistent, with the latest Consumer Price Index (CPI) figures staying above the 3% mark. This stickiness makes the Federal Reserve hesitant to cut rates as quickly as the market once expected.
The geopolitical risk premium, which was expected to fade in 2025, has returned due to ongoing conflicts and shipping disruptions in the Middle East. This has renewed some safe-haven demand for the US dollar, contrary to the previous year’s expectations. One-month implied volatility in USD/CHF has fallen below 7%, suggesting the market may be underpricing the risk of a further move higher.
Given this, traders should consider positioning for further USD/CHF strength, as the fundamental picture has changed entirely from last year. Fading any moves below 0.9000 seems like a viable strategy. Using options to construct bullish call spreads, such as buying the 0.9200 call and selling the 0.9400 call for the coming weeks, could offer a defined-risk way to profit from continued upside momentum.
