The US labor market is anticipated to stabilize, with Nonfarm Payrolls increasing by 70,000 and unemployment steady at 4.4%. The delayed release of the January consumer price index is set for Friday, impacting market perceptions.
Interest Rate Expectations
Interest rates by the Federal Reserve are expected to remain the same in March, with potential cuts in June or September. Various Fed presidents have echoed concerns about maintaining focus on inflation risks amidst a stabilizing job market.
The Swiss Franc (CHF), a top-ten traded currency globally, often serves as a safe-haven due to Switzerland’s stable economy and neutrality in global affairs. The currency’s value is closely tied to the Euro due to Switzerland’s reliance on the Eurozone, with models suggesting a correlation of over 90%.
Looking back at the analysis from 2025, we can see the market was pricing in a weak US dollar and a stable Swiss franc. The expectation then was for the USD/CHF pair to remain under pressure, trading near 0.7730, as the Fed was poised to cut rates while the SNB held firm. This was based on a view of a stabilizing, but not strong, US labor market.
As of today, February 9, 2026, that narrative has shifted significantly based on recent economic divergence. The latest US Nonfarm Payrolls report for January 2026 showed a much stronger-than-expected gain of 215,000 jobs, pushing the USD/CHF pair to around 0.8850. This contrasts sharply with the modest 70,000 job gain that was being forecast in early 2025.
Market Strategies
On the Swiss side, the situation remains largely unchanged, providing the core reason for the franc’s relative weakness. Swiss inflation for January 2026 was reported at a muted 1.4%, still comfortably below the SNB’s 2% target. This reinforces our view that the SNB has little incentive to tighten policy, keeping Swiss interest rates unattractive.
The Federal Reserve, after cutting rates twice in 2025, is now signaling a pause due to the resilient labor market and persistent inflation metrics. This policy divergence between a hawkish-leaning Fed and a firmly neutral SNB suggests the path of least resistance for USD/CHF remains upwards. We see the fundamental drivers for a stronger dollar against the franc as being more entrenched now than they were a year ago.
For derivative traders, this environment favors strategies that capitalize on continued upward momentum in USD/CHF. We are looking at buying call options with strike prices of 0.8900 and 0.9000 expiring in the next 4 to 8 weeks. This allows for participation in further gains while clearly defining the maximum risk on the position.
Given the strong trend, selling out-of-the-money put options could also be an effective strategy to collect premium. For instance, selling a put option with a 0.8700 strike price capitalizes on our expectation that any dips will be shallow and short-lived. However, traders must be mindful of the risk from any sudden, negative US economic data releases.
