USD/CHF was range-bound on Monday, trading near 0.7738 and down 0.16%. The Swiss franc was weighed by weaker Swiss data, while a softer US dollar capped gains.
The US dollar eased after President Donald Trump announced a 15% global tariff. This followed a US Supreme Court ruling that his use of the International Emergency Economic Powers Act (IEEPA) for broad tariffs was unlawful.
Trade Deal Frictions
The European Parliament has reportedly paused ratification of a US‑EU trade deal. India has postponed talks on an interim trade agreement with Washington.
The US Dollar Index (DXY) was around 97.67 after an intraday low near 97.35. US Factory Orders fell 0.7% month-on-month in December, versus expectations for a 1.1% rise, after a prior 2.7% increase.
Fed Governor Christopher Waller supported a 25 basis point rate cut at the January meeting. In Switzerland, Producer and Import Prices fell 0.2% month-on-month in January versus a 0.1% rise expected, and were down 2.2% year-on-year after a 1.8% fall in December.
Upcoming US events include ADP Employment Change and Conference Board Consumer Confidence on Tuesday, Trump’s State of the Union on Wednesday, Initial Jobless Claims on Thursday, and January PPI on Friday.
From 2025 Turbulence To 2026 Divergence
Looking back at early 2025, we saw the USD/CHF pair stuck in a tight range around 0.7738. This was largely driven by uncertainty over the Trump administration’s sudden trade tariffs and a weak Swiss Franc. The market at that time was waiting for clearer signals on both economic data and US policy.
The landscape has since shifted away from the erratic trade policy announcements that defined that period. Now, in February 2026, the primary driver is the clear policy divergence between the US Federal Reserve and the Swiss National Bank. Geopolitical trade concerns remain, but they are more predictable than the sudden tariff announcements of the past.
On the Swiss side, the deflationary pressures we saw in 2025 have eased slightly. January 2026 data showed Swiss consumer price inflation at 1.4% year-over-year, which is low but has moved away from the negative producer price figures seen last year. This provides a modest floor for the Franc, but it is not enough to signal a policy change from the Swiss National Bank.
In the United States, the labor market concerns expressed by Fed officials in early 2025 did not fully materialize into a major downturn. The most recent jobs report for January 2026 showed the US economy added a solid 195,000 jobs, keeping the unemployment rate low at 3.7%. This sustained strength has allowed the Federal Reserve to maintain its policy rate in the 3.50%-3.75% range.
This wide interest rate differential between the US and Switzerland makes holding the US Dollar more attractive than the Swiss Franc. Derivative traders should note that implied volatility for the pair has fallen from the highs seen during the trade policy turmoil of 2025. Lower volatility makes option strategies less expensive than they were a year ago.
Therefore, traders might consider strategies that profit from this interest rate gap and the relative economic stability. This could involve selling out-of-the-money puts on USD/CHF to collect premium, assuming the pair’s downside is limited by the policy divergence. Alternatively, long positions via call options or call spreads could be used to speculate on further upside driven by strong US economic performance.
