Insights 
VT 
Fed rate-cut expectations remain at 85%, placing the US Dollar under pressure despite solid data. Weekly jobless claims reported at 216,000, below the expected 225,000, show some labour market resilience, although there is a gradual cooling trend.
USD/CHF is trading around 0.8050 and remains under selling pressure due to broader USD weakness. Speculators predict a 25-basis-point cut in the upcoming December meeting, despite Durable Goods Orders exceeding expectations. Speculation over a potential change in Fed leadership adds to market dynamics.
Market Liquidity Imapct
Market liquidity is low due to the US Thanksgiving holiday, dampening volatility across assets and strengthening expectation-driven moves. The US Dollar Index remains near 99.57, failing to absorb benefits from robust data. Meanwhile, the Swiss National Bank is likely to maintain a 0.00% policy rate, potentially through 2027.
Swiss traders anticipate Q3 GDP and the KOF Leading Indicator data, poised to influence the local economic outlook. Until data release, USD/CHF faces a challenging environment amid Fed rate-cut speculation. US Dollar is stronger predominantly against the Swiss Franc, confirmed by heat map data illustrating percentage changes among major currencies.
The US Dollar is under considerable pressure as we see a near-certain Fed rate cut priced in for December. The market is ignoring strong data points like jobless claims and focusing on the bigger picture of a cooling economy, which we see in the latest core PCE number of 2.8%, the lowest since early 2023. This overwhelming sentiment is the main force driving currency movements right now.
This situation contrasts sharply with the Swiss National Bank’s position, which is expected to keep its policy rate steady for the foreseeable future, potentially until 2027. We just heard SNB Chairman Thomas Jordan reiterate the bank’s commitment to stability last week, with Swiss inflation holding at a comfortable 1.4%. This growing policy divergence between a dovish Fed and a neutral SNB puts strong, fundamental downward pressure on the USD/CHF pair.
Opportunities for Derivative Traders
For derivative traders, this creates a clear opportunity to position for a continued decline in USD/CHF. Buying put options with January 2026 expiry and strike prices around 0.8000 or 0.7950 could be an effective strategy to capitalize on this trend. The current low volatility due to the US holiday may present a chance to enter these positions at a reasonable cost.
We must also consider the risks, as a surprisingly weak Swiss GDP report tomorrow could cause a short-term reversal. A more cautious approach would be to use a bear put spread, which would involve buying a higher-strike put and selling a lower-strike one to reduce the upfront cost. This strategy would still profit from a downward move but would limit both the potential profit and the initial cash outlay.
