USD/CHF keeps trading around 0.7700 with markets at half throttle
- USD/CHF edges up from lows but remains trading sideways around 0.7700.
- Weak inflation figures in the US and Switzerland leave the pair looking for direction.
- Swiss Franc's strength is boosting speculation about an SNB intervention.
The US Dollar (USD) posts moderate gains against the Swiss Franc (CHF) on Monday, reaching the 0.7700 area at the time of writing. The pair, however, remains trapped within a narrow range, broadly between 0.7650 and 0.7730, with most Asian markets closed and the US in a long weekend due to the President’s Day holiday.
In Switzerland, Consumer Prices Index data released on Friday failed to support the Swissie. Consumer Inflation contracted 0.1% in January against expectations of a flat reading, mainly driven by the dropping import prices amid the Swiss Franc’s strength
Year-on-year, the CPI advanced 0.1%, in line with market expectations, although steady at the lower end of the Swiss National Bank’s (SNB) 0% to 2% range of price stability.
SNB intervention looming
The CHF has rallied nearly 3% against the US Dollar so far in 2026, after appreciating beyond 12% in the previous year. The Swiss Franc’s strength is putting into question the SNB's inflation forecasts, and speculation about an intervention to stem CHF strength is on the rise. This might warn speculative investors from placing larger CHF longs for some time.
The US Dollar, however, keeps consolidating near lows against its main peers. US consumer inflation data shows a 0.2% rise in January, below the 0.3% expected, while year-on-year, prices moderated to 2.4%, from 2.7% in December, undershooting the 2.5% reading anticipated by the market.
These figures give some leeway to the US Federal Reserve to cut interest rates further, to boost the labour market’s recovery, which is weighing on a steady US Dollar recovery.
(This story was corrected on February 16 at 13:00 GMT to say that the Swiss CPI contracted 0.1% in January, and not in December, as previously stated, and that the CPI was 2.7% in December, and not in November.)
SNB FAQs
The Swiss National Bank (SNB) is the country’s central bank. As an independent central bank, its mandate is to ensure price stability in the medium and long term. To ensure price stability, the SNB aims to maintain appropriate monetary conditions, which are determined by the interest rate level and exchange rates. For the SNB, price stability means a rise in the Swiss Consumer Price Index (CPI) of less than 2% per year.
The Swiss National Bank (SNB) Governing Board decides the appropriate level of its policy rate according to its price stability objective. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame excessive price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Yes. The Swiss National Bank (SNB) has regularly intervened in the foreign exchange market in order to avoid the Swiss Franc (CHF) appreciating too much against other currencies. A strong CHF hurts the competitiveness of the country’s powerful export sector. Between 2011 and 2015, the SNB implemented a peg to the Euro to limit the CHF advance against it. The bank intervenes in the market using its hefty foreign exchange reserves, usually by buying foreign currencies such as the US Dollar or the Euro. During episodes of high inflation, particularly due to energy, the SNB refrains from intervening markets as a strong CHF makes energy imports cheaper, cushioning the price shock for Swiss households and businesses.
The SNB meets once a quarter – in March, June, September and December – to conduct its monetary policy assessment. Each of these assessments results in a monetary policy decision and the publication of a medium-term inflation forecast.