Snapshot: USD/CHF trades at 0.7901, up 0.12% on the session, as the SNB’s easing bias continues to weigh on the Swissy. The SNB’s active easing posture, reinforced by Schlegel’s recent comments, keeps negative rate optionality alive, especially with headline CPI near zero. All eyes on the 14:00 ET FOMC decision and press conference.
- Watch for a break above 0.7903 in USD/CHF to signal further upside.
- Risk: Hawkish surprise from the FOMC could pressure USD/CHF lower despite SNB stance.
Bias into NY: We favour further USD/CHF upside as the SNB remains willing to ease further, including the possibility of returning to negative rates should disinflation accelerate, and the 393bp US-CH 10Y yield spread continues to widen. A daily close above 0.7920 would confirm this view.