The US Dollar rose modestly against the Swiss Franc on Friday, moving back above 0.7700 and trading at 0.7714. Despite this, USD/CHF stayed within the past two days’ range and was set for a 0.5% weekly fall.
The Swiss Franc weakened after Swiss CPI data showed prices fell 0.1% in January, versus expectations for no change. Annual inflation stayed at 0.1%, in line with forecasts.
Swiss Inflation And SnB Policy
The inflation data increased attention on whether the Swiss National Bank could ease policy below the current 0% benchmark rate. Market focus now includes the next steps for Swiss monetary policy after the latest inflation reading.
The US Dollar received some support as equity markets reversed amid recent AI-related moves. Trading was cautious ahead of US CPI data due later on Friday.
US headline CPI was expected to be 0.3% in January. Year-on-year inflation was forecast at 2.5%, down from 2.7% in December.
The pressure we saw on the Swiss National Bank this time last year appears to be continuing into 2026. We remember how deflationary fears in January 2025 pushed the SNB towards a more dovish stance. Today, with the latest data for January 2026 showing Swiss annual inflation at a stubbornly low 0.4%, that pressure for rate cuts remains very much alive.
Trading Strategies For Usd Chf
In contrast, the Federal Reserve faces a different picture, as recent US CPI figures for January 2026 showed inflation holding at 2.9% year-over-year. This is significantly stickier than the 2.5% rate anticipated back in early 2025, suggesting the Fed has far less room to cut rates aggressively. This growing divergence between a dovish SNB and a more patient Fed should continue to favor USD strength against the CHF.
Given this outlook, we should consider positioning for a continued rise in the USD/CHF pair over the next few weeks. Buying call options on USD/CHF offers a direct way to profit from this expected upward move. CME Group data shows open interest in March expiry calls with a 0.7800 strike has increased by 15% in the last week alone, indicating a build-up of bullish sentiment.
For those seeking a more conservative approach, selling out-of-the-money put options on USD/CHF could be a viable strategy to collect premium. This position profits if the pair trades sideways or moves higher, capitalizing on the view that significant CHF strength is unlikely. Implied volatility for these options has remained relatively subdued, suggesting the market is not pricing in a sharp downturn for the pair in the near term.
