USD/CHF traded near 0.7690 in early European hours on Monday, after opening above its prior close. The pair stayed in a tight range as the Swiss Franc held steady.
Swiss CPI inflation was 0.1% year on year in January, unchanged from December. This sits at the lower edge of the SNB’s 0%–2% price-stability band.
Swiss Inflation And SNB Signals
Month on month, Swiss CPI fell 0.1%, against an expectation of 0%. SNB President Martin Schlegel said the bank is willing to allow short spells of negative inflation while focusing on medium-term aims.
Schlegel also said low inflation and a 0% policy rate leave the SNB in a difficult position. Expectations for an accommodative SNB stance were little changed after the data.
USD/CHF may also face pressure if the US Dollar weakens after softer US inflation data. US CPI rose 2.4% year on year in January, down from 2.7% in December and below a 2.5% forecast.
US CPI was 0.2% month on month, down from 0.3% and below a 0.3% expectation. CME FedWatch shows nearly a 90% chance of no change in March, up from nearly 83% a week earlier, with a 25-basis-point cut in June priced at about 50.5%.
Options And Forward Positioning
Looking back at early 2025, we saw the groundwork being laid for a dovish Swiss National Bank as inflation hovered near zero. That trend has largely held, with the latest January 2026 CPI figures from the Swiss Federal Statistical Office showing inflation at a subdued 0.5% year-over-year. This keeps the pressure off the SNB to consider any tightening measures, reinforcing the franc’s position as a low-yielding currency.
The SNB’s consistent and predictable policy stance, a theme we tracked throughout 2025, has kept implied volatility in CHF currency pairs relatively low. This environment suggests that buying call options on USD/CHF could be a capital-efficient way to position for further upside. The low cost of these options presents a favorable risk-to-reward scenario for a move higher in the coming weeks.
On the other side of the pair, the US outlook has become more complex than we anticipated back in early 2025. While the Federal Reserve did deliver two rate cuts in the second half of last year, recent US CPI data for January 2026 came in hotter than expected at 2.8%. This sticky inflation has traders dialing back expectations for further cuts, providing underlying support for the dollar.
This policy divergence between a dovish SNB and a more hesitant Fed strongly supports a continued upward trend in USD/CHF, which has climbed from the 0.7700 level seen last year to around 0.8100 today. Traders could consider strategies like a bull call spread to capitalize on this view with a defined risk profile. For instance, buying a 0.8150 strike call and selling a 0.8300 strike call for the upcoming April expiration could offer a cost-effective way to profit from a gradual climb.
