The USD/CHF pair increased to about 0.8010 during the early European session on Thursday. The Swiss Franc weakened against the US Dollar after Switzerland’s inflation data for November showed a surprising 0% annual change. This data, released by the Swiss Federal Statistical Office, indicates that the Swiss National Bank will likely maintain its supportive monetary policy, which may further weaken the Franc against the USD. Additionally, US President Donald Trump is expected to announce the next Fed chair in early 2026, with Kevin Hassett as a possible candidate. Hassett supports rate cuts, which could influence the USD. ADP’s report indicated a loss of 32,000 jobs in November, a significant drop compared to the expected growth of 5,000 jobs. This follows the revised increase of 47,000 jobs in October. The CME FedWatch Tool now shows an 89% chance of a quarter-point rate cut next week. Market sentiment, economic health, and the Swiss National Bank’s actions directly impact the Swiss Franc. It is viewed as a safe-haven currency due to Switzerland’s stable economy, strong exports, and political neutrality. The Franc’s value is significantly affected by changes in macroeconomic data and Eurozone monetary policies. The rise above 0.8000 in USD/CHF is primarily due to Switzerland’s inflation unexpectedly registering zero for November. This strengthens our belief that the Swiss National Bank, which has kept its policy rate at 1.50% for the last three quarters, will continue its supportive stance into next year. Traders currently prefer the dollar over the Franc due to this clear difference in interest rates. However, this rise appears fragile as concerns grow about the US economy. The latest Initial Jobless Claims report showed a significant increase to 245,000, far above the 215,000 consensus, reinforcing the weakness indicated by the ADP jobs loss. These job figures make a Fed rate cut next week seem highly likely, with an 89% probability priced in by the markets. This situation creates an opportunity for a potential market reversal, which is best approached using derivatives to manage risk. We suggest buying put options on USD/CHF, aiming for a decline after the expected Fed rate cut. This strategy allows us to benefit from a potential decrease in the pair while limiting our maximum loss to the premium paid for the options. Looking ahead to early 2026, the political uncertainty surrounding the new Fed chair appointment is likely to keep market volatility high. Kevin Hassett, the leading candidate, is expected to support a more aggressive rate-cutting approach. This long-term dovish outlook on the dollar points toward a bearish trend for the USD/CHF pair beyond the upcoming weeks.

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