USD/CHF stays muted around 0.7720 as the Swiss Franc strengthens due to increased safe-haven interest

USD/CHF Continues Downward Trend Amid Rising Safe-Haven Demand

The USD/CHF currency pair has now declined for five straight sessions, hovering near 0.7720 during Thursday’s Asian trading. This ongoing weakness is largely attributed to increased demand for the Swiss Franc, which is being favored as a safe-haven asset due to escalating global trade tensions.

Despite the US Supreme Court blocking portions of his proposed tariffs, President Donald Trump pressed ahead with new 10% tariffs on several trading partners. In his State of the Union speech, Trump highlighted the US economic recovery, defended his tariff policies as beneficial for growth, and criticized the Court’s intervention in his trade agenda.

The Swiss Franc’s strength is also underpinned by diminishing expectations for imminent interest rate reductions from the Swiss National Bank (SNB). Inflation in Switzerland remained steady at 0.1% in January, staying at the lower boundary of the SNB’s 0–2% target and aligning with the central bank’s first-quarter outlook. With inflation forecasted to rise gradually, most analysts anticipate the SNB will keep interest rates unchanged for the time being.

Additionally, the Swiss ZEW Expectations Index saw a notable improvement, climbing to 9.8 in February from -4.7 in January. This marks the second-highest reading since January of the previous year and signals growing confidence that the SNB will maintain its policy rate at 0% through at least 2026.

Key Data Releases Ahead

Investors are now turning their attention to Switzerland’s fourth-quarter employment figures, which are set to be released later today, as well as Q4 GDP data expected on Friday. In the United States, the market will be watching for the latest Weekly Initial Jobless Claims report during the North American session.