Snapshot: USD/CHF trades at 0.7846, down 0.12% on the session. The pair is pressured by the SNB’s active easing posture and readiness to intervene in FX markets to combat persistent CHF strength. Schlegel’s recent comments kept negative rate optionality alive should disinflation overshoot.
- Watch 0.7840; a break opens the door to testing recent lows.
- Risk: US 08:30 ET data could trigger a dollar rebound and reverse the current move.
Bias into NY: Short USD/CHF. The SNB’s dovish stance and potential for FX intervention outweighs modest dollar strength stemming from the slight steepening of the US 2s10s curve. Target 0.7800.