The USD/CHF pair is trading in a tight range near 0.8275 during Wednesday’s European session, holding firm above the key psychological support at 0.8250. The pair has retained most of its nearly 1% gains from the previous session, thanks to renewed US Dollar (USD) strength driven by improved US economic data and investor caution ahead of the FOMC minutes.

The US Dollar Index (DXY) remains steady near 99.50 following upbeat US Consumer Confidence data released on Tuesday. It reflects growing optimism about the resilience of the US economy and supports the US dollar across major currency pairs. Investors are closely watching for the Federal Reserve’s meeting minutes later in the day, which could offer more clues about the future path of interest rates.

Despite the USD’s strength, the Swiss Franc (CHF) remains attractive to buyers due to its safe-haven appeal amid lingering global uncertainties. Ongoing geopolitical tensions, including the unresolved Russia-Ukraine conflict and persistent concerns over the US fiscal outlook, are keeping risk sentiment subdued and offering a cushion to the CHF.

Meanwhile, dovish commentary from Swiss National Bank (SNB) Chairman Martin Schlegel adds pressure on the Franc. Speaking at an event in Basel, Schlegel warned of subdued inflation and rising volatility, noting that even negative inflation figures can’t be ruled out in the coming months. He emphasized that while inflation is at 0.0%—the bottom of the SNB’s 0–2% target — the central bank remains focused on maintaining medium-term price stability, not short-term figures.

Market participants now widely expect the SNB to cut interest rates again at its June 19 meeting. Reuters reports a 75% probability of a 25 basis point cut to 0.00%, with a 25% chance of a deeper 50 bps move that would take rates back into negative territory.

Trade Idea:
Buy USD/CHF on dips toward 0.8250, targeting 0.8350–0.8380, with a stop-loss below 0.8200. SNB rate cut expectations may keep the CHF under pressure against a resilient USD.