The Swiss Franc weakened against the US Dollar on Thursday as the Dollar strengthened. USD/CHF traded near 0.7750 after hitting an intraday low around 0.7694.
Swiss trade data showed exports rose to CHF 22,229 million in January from CHF 19,866 million. Imports fell to CHF 18,411 million from CHF 18,932 million. This lifted the trade surplus to CHF 3,818 million from CHF 934 million.
Swiss Output Trends
Industrial production fell 0.7% year on year in the fourth quarter. This followed a 2% increase in the previous reading.
The US Dollar also gained after the Federal Reserve released its meeting minutes on Wednesday. The minutes pointed to a cautious approach. They suggested rates may stay unchanged for a while as officials review incoming data. However, the Fed left room for further rate hikes if inflation remains above target.
The minutes also said rate cuts could come later this year if price pressures ease as expected. They added that most participants see signs the labour market is starting to stabilise.
Markets are pricing in about two US rate cuts in the second half of the year. The US Dollar Index (DXY) traded near 97.82, its highest level since February 6.
Key Upcoming US Data
Thursday’s US releases include weekly Initial Jobless Claims and the Philadelphia Fed Manufacturing Survey. Focus then shifts to Friday’s Core PCE Price Index and the advance estimate of fourth-quarter US GDP.
Looking back to early 2025, the US Dollar stayed strong because the Fed remained cautious. USD/CHF was trading around 0.7750 as officials debated keeping rates higher for longer. That caution proved well-founded, as the Fed delivered only one quarter-point rate cut late in 2025.
This differs sharply from the Swiss National Bank. With weak industrial data, the SNB cut its policy rate twice in 2025, bringing it to 1.00%. This widening policy gap increased the interest rate advantage for the Dollar. As a result, USD/CHF has risen strongly over the past year and now trades near 0.8900.
US inflation is still higher than expected. The latest January 2026 CPI reading was 2.8%. Swiss inflation is much lower at 1.2%, giving the SNB little reason to tighten policy. This backdrop continues to support long USD/CHF positions through futures contracts, aiming to benefit from both possible price gains and positive carry.
Uncertainty over the timing of additional Fed cuts in 2026 has pushed FX volatility higher. Traders may want to use options to manage this risk. Buying USD/CHF call options can provide upside exposure while setting a clear maximum loss.
Create your live VT Markets account and start trading now.
here to set up a live account on VT Markets now
