USD/CHF climbed to around 0.7700 on Monday. Trading was quiet and stayed in a narrow band between about 0.7650 and 0.7730, as many Asian markets were closed and the US was shut for President’s Day.
Swiss CPI data released on Friday showed inflation fell by 0.1% in January, compared with expectations for no change. The decline was mainly due to lower import prices and a stronger Swiss franc.
Swiss Inflation Stays Near The Bottom Of The SNB Range
Year over year, Swiss CPI rose 0.1%, in line with forecasts. This keeps inflation near the lower end of the Swiss National Bank’s 0% to 2% price stability range.
The Swiss franc has gained almost 3% against the US dollar so far in 2026, after rising more than 12% last year. This has increased talk that the SNB could step in to slow any further CHF gains.
The US dollar is still trading near recent lows versus major peers. US consumer inflation rose 0.2% in January versus 0.3% expected, and the annual rate fell to 2.4% from 2.7% in December, below the 2.5% forecast.
A correction dated 16 February at 13:00 GMT said Swiss CPI fell in January, not December, and that US CPI was 2.7% in December, not November.
Market Catalysts And Strategy Implications
The tight USD/CHF range suggests both currencies are weak for different reasons, which makes trading conditions difficult. The US dollar is capped by expectations of Federal Reserve rate cuts. The Swiss franc is held back by disinflation. With neither side in control, strategies that benefit from low volatility, such as selling short-dated straddles, may work in the near term.
The main risk is a surprise SNB move to weaken the franc, especially after its strong gains through 2025. The latest drop in Swiss PMI to 49.2 shows the stronger franc is already hurting the export-led economy, which gives the SNB a reason to act. Because of that, buying longer-dated, out-of-the-money USD/CHF call options can be a lower-cost way to prepare for a sudden upside spike.
It is also important to remember the market shock in January 2015, when the SNB unexpectedly removed its currency floor against the euro. Volatility surged to extreme levels. That episode shows the central bank can make major policy shifts without warning. In this environment, holding unhedged short USD/CHF positions carries high risk.
On the US side, the dollar is also limited by domestic data. The latest jobs report showed Non-Farm Payrolls at 155,000, below forecasts. This points to a cooling labor market and supports the case for more Fed easing. Fed funds futures now price in a more than 70% chance of a rate cut by the April meeting, which could keep pressure on the dollar.
With these forces pulling in opposite directions, any break from the 0.7650–0.7730 range could be fast and large. A long-volatility strategy, such as buying a strangle, may be attractive because it can profit from a big move either way. It also helps protect a trader from being caught on the wrong side of either SNB action or a more aggressive Fed cut.
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