USD\/CHF stayed weak for a second day, trading near 0.7840 in Asian hours on Monday after falling towards 0.7850. The US Dollar kept losing ground even as demand for safe-haven assets rose.<\/p>\n
Pressure on the US Dollar may ease as a ceasefire comes under strain. Israel and Hezbollah increased attacks despite a US-brokered extension intended to pause fighting for three weeks.<\/p>\n
US President Donald Trump cancelled a delegation to Pakistan that could have discussed Iran directly. On Saturday, he told Jared Kushner and Steve Witkoff to skip the trip, saying Iran \u201coffered a lot, but not enough\u201d, while Iranian President Masoud Pezeshkian said Iran will not enter \u201cimposed negotiations under threats or blockade.\u201d<\/p>\n
Bloomberg reported on Monday that Iran sent the US a proposal to reopen the Strait of Hormuz and end the war, including delaying nuclear talks. The plan also called for extending the ceasefire to work towards a lasting end to fighting.<\/p>\n
SNB Chairman Martin Schlegel said the central bank remains open to policy changes and FX intervention. He reaffirmed willingness to buy foreign currencies to weaken the Swiss Franc, and cited more uncertainty, muted near-term growth, and rising inflation as energy costs increase.<\/p>\n
We saw significant tension in late 2025 as geopolitical risk, evidenced by the VIX trading above 25, created safe-haven demand for the Swiss Franc. However, the Swiss National Bank\u2019s clear intention to intervene against CHF strength proved to be the more dominant force. Derivative traders should now focus on strategies that benefit from the SNB capping any major upside in the franc, such as selling out-of-the-money call options.<\/p>\n
The subsequent climb in USD\/CHF from near 0.7850 to its current level around 0.8500 shows this policy in action. Data released for Q1 2026 confirmed a notable increase in the SNB\u2019s foreign currency reserves, a clear sign of their active market intervention. This history suggests that selling CHF strength on rallies remains a viable strategy, as the central bank has demonstrated its resolve.<\/p>\n
While the US Dollar was weak in late 2025, the focus has since shifted back to interest rate differentials. Recent US core PCE inflation data for March 2026 came in at 2.9%, reinforcing the view that the Federal Reserve will be slower to cut rates than the SNB. This policy divergence supports a structurally higher USD\/CHF, making long dollar positions against the franc attractive on any significant dips.<\/p>\n
Despite the current calm, the underlying Middle East tensions from last year have not been fully resolved, as shown by sporadic naval incidents near the Strait of Hormuz in early 2026. This means sudden spikes in volatility remain a significant risk. Traders should therefore consider buying cheap, long-dated options to hedge against an unexpected flare-up in conflict that could rapidly strengthen the franc before the SNB can react.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD\/CHF weak near 0.7840 as dollar softens; Middle East tensions, Iran diplomacy, and SNB intervention watch.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-45915","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45915","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=45915"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45915\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45915"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45915"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45915"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}