USD/CHF fell for a seventh day and traded near 0.7830 in Asian hours on Tuesday. The move followed reports that the US and Iran may hold further talks before a two-week truce ends.
Donald Trump said Iran had made contact and wanted to resume negotiations. JD Vance referred to ongoing diplomatic efforts and said weekend talks were constructive for understanding Iran’s stance.
Swiss Franc Support And SNB Watch
The Swiss franc found support as oil prices eased, which raised attention on possible Swiss National Bank policy adjustments. Switzerland’s annual consumer inflation rose to 0.3% in March from 0.1% in February, the highest in a year, while the SNB repeated it could intervene to limit excessive CHF strength.
The US dollar also faced pressure as the drop in oil prices reduced hawkish pricing around the Federal Reserve outlook. Fed Governor Stephen Miran said the energy shock linked to Iran had not altered long-term inflation expectations and that inflation could return to target within a year.
US Treasury Secretary Scott Bessent told Semafor the US should “wait and see” before cutting rates. He said he expects recent price rises will not become embedded in inflation expectations.
Given the continued slide in USD/CHF, we should consider strategies that benefit from further Swiss Franc strength in the near term. Buying put options on the USD/CHF pair offers a way to profit from this downward momentum while limiting potential losses to the premium paid. This is particularly relevant as the market is pricing in a higher probability of a US-Iran deal, which reduces demand for the safe-haven US Dollar.
Risk Management And Cross Market Positioning
However, we must be cautious of the Swiss National Bank, as the pair approaches levels that have historically triggered intervention. We saw the SNB aggressively defend the Franc back in the 2015-2022 period, and their recent statements confirm they are ready to act again. A long volatility strategy, such as a straddle, could be prudent to capture a sharp move in either direction should the SNB surprise the market or the Iran talks suddenly collapse.
On the US side, the market seems to be ignoring underlying inflation risks. We remember that US Core CPI remained stubbornly above 3.5% for much of 2025, so the current relief from falling oil prices might be temporary. If upcoming US economic data shows persistent price pressures, the Federal Reserve could quickly turn hawkish again, causing a sharp reversal in the Dollar’s fortunes.
This situation is deeply connected to the energy markets, where easing tensions are pushing crude oil prices down. The prospect of a deal reduces the risk premium associated with potential supply disruptions in the Strait of Hormuz, where nearly 20% of the world’s oil transits daily. Consequently, bearish positions on crude oil futures could serve as a complementary trade to a short USD/CHF stance.
