USD/CHF rose on Thursday after rebounding from near 0.7900 on Wednesday. The pair is struggling to hold above the 0.8000 level despite softer-than-expected Swiss inflation data.
Swiss Federal Statistical Office figures showed CPI rose to 0.3% year-on-year in March from 0.1% in February, below the 0.5% forecast. Monthly inflation slowed to 0.2% from 0.6%, also under the 0.5% consensus.
Swiss Inflation And SNB Policy Outlook
Heating oil prices were cited as the main driver of the increase in consumer prices, linked to the war in Iran. Energy costs lifted annual inflation to its highest level in one year, which may reduce pressure on the Swiss National Bank (SNB) to take rates into negative territory.
The Swiss franc’s gains may be limited as risk-averse sentiment supports the US Dollar. After President Trump’s televised speech on Wednesday, equities fell sharply while the US Dollar and crude prices rose, following renewed warnings of “crushing, broader and destructive” attacks on Iran.
A correction on April 2 at 09:30 GMT amended the central bank name to SNB, not SBB.
Looking back at the situation in early 2025, we saw the US Dollar strengthen against the Swiss Franc, driven by weak Swiss inflation and geopolitical risks from the Iran conflict. At that time, the pair was struggling to break above the 0.8000 level. The market dynamic was clearly favoring the dollar as a safe-haven asset.
Trading Implications For USDCHF
The picture today is fundamentally different. Swiss inflation has accelerated significantly, with the latest data for March 2026 showing a year-on-year CPI of 1.7%, a stark contrast to the mere 0.3% we observed in March 2025. This persistent price pressure has forced the Swiss National Bank to change its stance, hiking its key policy rate to 1.5% just last month.
This contrasts with the situation in the United States, where recent inflation figures have moderated, leading to speculation that the Federal Reserve may pause its own tightening cycle. This policy divergence, where the SNB is now more hawkish than the Fed, is a major reversal from 2025. The geopolitical risk premium that boosted the dollar last year has also faded since the de-escalation of the Iran conflict in late 2025.
Given this environment, traders should consider positions that benefit from Swiss Franc strength against the US Dollar. With the USD/CHF pair currently trading near 0.9050, purchasing put options with a strike price around 0.8900 could offer a favorable risk-reward profile for the coming weeks. A bear put spread could also be used to reduce the initial cost while targeting a move back towards the 0.8800 support level seen earlier this year.
