The US Dollar rose against the Swiss Franc on Thursday after US Initial Jobless Claims fell to 206K from a revised 229K, below the 225K forecast. The figures followed the Federal Reserve holding rates at 3.50% to 3.75% in January, with minutes showing officials split and some considering hikes if inflation stays high.
In Switzerland, Q4 Industrial Production dropped 0.7% year on year after a 2.0% rise in the prior quarter. This was the first contraction since Q2 2024, while the Swiss National Bank policy rate remained at 0%.
Focus On Us Core Pce
The next scheduled US event is December core Personal Consumption Expenditures (PCE) inflation on Friday. The data may affect rate pricing ahead of the March meeting.
USD/CHF rose for a fourth session, reaching 0.7762 and gaining nearly 0.3%, the highest level in eight trading days. It remained below the 50-day EMA at 0.7833 and the 200-day EMA at 0.8048, following a retreat from near 0.8041.
The move lifted the pair from around 0.7680 and recovered about half of the prior week’s fall. Resistance is at 0.7800 and 0.7834, with support at 0.7700 and then 0.7605.
The divergence between the US and Swiss economies is becoming more pronounced, and this should guide our strategy. The sharp drop in US jobless claims to 206K continues the trend of a surprisingly resilient labor market that we observed throughout 2025. This strength gives the Federal Reserve little reason to consider cutting interest rates from their current 3.50% to 3.75% range.
Strategy And Positioning
All eyes are now on tomorrow’s US core PCE inflation report, which is the key event risk. The market is pricing in a year-over-year figure close to the 3.1% we saw in the November 2025 reading, and a number higher than that could force a repricing of Fed expectations for the March meeting. This makes holding outright long positions risky ahead of the release.
Meanwhile, the Swiss economy is showing clear signs of strain, evidenced by the first industrial production contraction since the second quarter of 2024. This weakness, reflecting the slowdown in their key European trading partners like Germany last year, likely keeps the Swiss National Bank on hold at its 0% policy rate. This growing policy gap between a firm Fed and a stagnant SNB is the primary driver for this pair.
Considering the technicals, the USD/CHF is rallying but remains in a broader downtrend below key moving averages. We see an opportunity in buying short-dated call options to express a bullish view for the coming weeks. This approach allows us to profit if strong US inflation data pushes the pair above the 0.7834 resistance level, while capping our risk if the data is soft and the downtrend resumes.
A sustained break above that 50-day moving average would signal a potential shift in momentum, targeting the 0.7900 area next. Conversely, if the PCE data disappoints and the price falls back below 0.7700, it would confirm the recent move was just a temporary correction. The plan is to see how the market reacts to the inflation number before adding to any positions.
