The Swiss National Bank kept its policy rate at 0% after its second-quarter meeting. In its statement, it lifted its inflation forecasts to 0.6% for 2027 and 0.7% for 2028, from 0.5% and 0.6% respectively, while leaving its 2026 GDP growth view unchanged at around 1%. The SNB said it would keep monitoring conditions and adjust monetary policy if required to maintain price stability, and its baseline scenario points to inflation worldwide staying elevated in coming quarters due to higher raw material prices, with global growth expected to be more moderate in the near term than in prior quarters.<\/p>\n
The Swiss franc weakened after the decision, pushing USD\/CHF back above the 0.8000 psychological level, though broad US dollar softness kept the pair below its highest point since early April, reached on Wednesday. Technically, USD\/CHF retains a bullish near-term bias above the 200-period EMA, with the RSI near 62 and a positive MACD reading. Initial support sits at the 200-period EMA of 0.7957; a daily close below would undermine the bullish structure, while holding above it keeps dip-buying interest in play.<\/p>\n
We see the Swiss National Bank’s decision to hold its policy rate at 0% as expected, removing any immediate catalyst for Swiss Franc strength. The central bank’s slightly higher inflation forecasts for 2027 and 2028 suggest a reluctance to ease policy further down the line. This reinforces our view that the path of least resistance for the Franc is sideways to weaker against currencies with higher interest rates.<\/p>\n
Looking at the broader market as of June 2026, the rate differential is key to our strategy. Swiss inflation, which came in at 1.1% year-over-year in the latest May report, is significantly below the 2.8% rate in the United States and 2.5% in the Eurozone. With the Federal Reserve\u2019s policy rate at 3.0%, the yield advantage of holding US Dollars over Swiss Francs remains substantial, encouraging a “carry trade” that should support USD\/CHF.<\/p>\n
For the coming weeks, we will consider strategies that benefit from USD\/CHF staying above its key technical support level of 0.7957. Selling out-of-the-money put options with strike prices near 0.7950 is an attractive way to collect premium, profiting from time decay and the market’s bullish structure. This is a bet that the pair will not break down significantly from its current levels.<\/p>\n
We must also manage the risk from broader US dollar trends, which have been soft lately. Implied volatility in CHF options has fallen to a 2-year low of just 5.8%, making it relatively cheap to purchase protection or directional bets. Therefore, using bull call spreads on USD\/CHF\u2014buying a call and selling a higher-strike call\u2014could be a prudent way to position for a modest rally while defining our risk if the dollar’s weakness accelerates.<\/p>\n","protected":false},"excerpt":{"rendered":"
SNB holds rates at 0%, raises inflation forecasts; franc weakens as USD\/CHF stays bullish above key support.<\/p>\n","protected":false},"author":87,"featured_media":52973,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-52823","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t