The USD/CHF moves up to nearly 0.7930 during Asian trading, buoyed by US-China trade tension relief. The US Dollar Index climbs 0.12% to 98.70, reviving the US Dollar’s two-day uptrend.

This upward trajectory comes as Donald Trump suggests a possible agreement with China, and a potential end to the US government shutdown supports market sentiment. Inflation data release, delayed by the shutdown, remains a focal point this week.

Swiss Economic Concerns

The Swiss Franc shows little activity despite apprehensions surrounding Switzerland’s economic forecast. SECO projects a 1.3% economic growth this year, lower than average, and revises the 2026 GDP estimate from 1.2% to 0.9%.

The US Dollar retains its dominance globally, comprising over 88% of foreign exchange trades, averaging $6.6 trillion daily in 2022. The Federal Reserve’s monetary policy decisions continue to influence its value. Adjusting interest rates is its primary mechanism to control inflation and employment levels.

Quantitative easing and tightening, major methods employed at economic extremes, can weaken or bolster the US Dollar, respectively. This financial strategy addresses credit flows, playing a vital role during events like the 2008 financial crisis.

The current upward drift in the USD/CHF pair to near 0.7930 presents a tactical opportunity for us. The combination of easing US-China trade tensions and the anticipated reopening of the US government provides a strong tailwind for the US Dollar. We should position for continued, albeit modest, dollar strength against the franc.

Market Optimism and Strategic Moves

On the US side, the market is pricing in optimism ahead of the Trump-Xi meeting, a sentiment we last saw during the temporary trade truces of the 2018-2019 period. Recent shipping data from the Port of Los Angeles for the third quarter of 2025 showed a 2.1% uptick in container volume from China, supporting the view that commercial ties are already starting to mend. A positive outcome from the meeting could push the dollar higher.

Conversely, the Swiss Franc is struggling under the weight of a weakening domestic economy. The official forecast slashing 2026 GDP growth to a meager 0.9% suggests the Swiss National Bank will have no choice but to maintain its dovish stance. With Swiss inflation remaining stubbornly low, tracking at just 1.1% year-over-year in the latest reading, there is no pressure for the SNB to consider tightening policy.

Given this backdrop, we are looking at buying USD/CHF call options with strike prices just above the 0.8000 psychological level. Selecting expirations in mid-to-late November allows time for the market to react to both the US-China summit and the upcoming US inflation data. This strategy provides upside exposure with a clearly defined and limited risk.

The primary risk to this trade is this Friday’s delayed US CPI report. The market has been starved of hard data for weeks, and a miss on the consensus forecast for a 0.3% month-over-month rise in core inflation could rapidly reverse the dollar’s recent strength. We must be prepared for volatility, as a weak inflation number would dampen expectations of continued Federal Reserve hawkishness.

Create your live VT Markets account and start trading now.