USD\/CHF slipped after small gains, trading near 0.7660 in Asian hours on Wednesday, with the move taking it towards 0.7650. The pair weakened as the US Dollar fell ahead of the delayed US jobs report due Wednesday.<\/p>\n
Markets expect January Nonfarm Payrolls to rise by 70,000, with the Unemployment Rate seen steady at 4.4%. US Retail Sales were unchanged at $735 billion in December after a 0.6% rise in November, missing forecasts for a 0.4% increase.<\/p>\n
Year on year, Retail Sales increased 2.4%, and total sales for October\u2013December 2025 rose 3.0% (\u00b10.4%) versus the same period a year earlier. Markets expect the Federal Reserve to keep rates unchanged in March, with a first cut priced for June and a possible second cut in September.<\/p>\n
The Swiss Franc gained support from safe-haven demand amid concerns linked to artificial intelligence and reports on guidance from Chinese regulators to limit exposure to US Treasuries. Switzerland\u2019s January inflation data is due Friday, with annual inflation expected at 0.1%.<\/p>\n
SNB Chairman Martin Schlegel referred to low inflation alongside a 0% policy rate, and the SNB target range remains 0\u20132%. The Swiss Franc was pegged to the euro between 2011 and 2015, and the removal of the peg led to a rise of more than 20% in its value.<\/p>\n
The landscape we are facing today is quite different from what we saw in early 2025. The US economy just added a surprisingly strong 225,000 jobs in January, as reported last week, which has pushed the unemployment rate down to just 3.6%. This robust data suggests a far more resilient economic picture than the modest 70,000 job gain that was expected a year ago.<\/p>\n
This recent strength, combined with a sticky Consumer Price Index holding at 3.2%, has changed our view on the Federal Reserve’s path. Unlike last year when we anticipated rate cuts by June, the market now sees the Fed holding rates steady until at least the third quarter. This shift provides a solid foundation for renewed US Dollar strength in the near term.<\/p>\n
Meanwhile, the Swiss Franc continues to attract some safe-haven flows due to persistent global uncertainties. However, with Switzerland\u2019s own inflation coming in at a manageable 1.4% last week, the Swiss National Bank has considerable room to act. This sets up a clear policy divergence, where the SNB may be inclined to cut interest rates well before the Federal Reserve.<\/p>\n
For derivative traders, this divergence suggests a potential upward trend for the USD\/CHF pair. We think buying call options on USD\/CHF with expirations in the next one to two months offers a good risk-defined way to position for dollar strength. This strategy would profit if the pair moves higher, while the maximum loss is limited to the premium paid for the options.<\/p>\n
Looking at historical data, we recall the extreme volatility in 2015 when the SNB abruptly removed its peg to the Euro. While we do not expect such a dramatic event, it serves as a reminder that the SNB is capable of surprising the market. Therefore, selling cash-secured puts on USD\/CHF could also be an attractive strategy to collect premium, banking on the idea that the Fed\u2019s hawkish stance will prevent a significant drop in the pair.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD\/CHF dipped near 0.7660 as dollar weakened pre-NFP; Swiss franc buoyed by safe-haven demand, low inflation.<\/p>\n","protected":false},"author":62,"featured_media":16960,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41568","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41568","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=41568"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41568\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16960"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=41568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=41568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=41568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}