USD/CHF surges as SNB cuts to 0%, signals negative rates possible

USD/CHF jumped 0.8% to 0.9125 following the Swiss National Bank's 25 basis point rate cut to 0%, as expected by markets. SNB Chairman Thomas Schlegel's warning that Switzerland is "on the verge of negative interest rate territory" sparked immediate franc weakness across all major pairs. The central bank cited persistent deflationary pressures and franc strength as key concerns, leaving the door open for further easing. Markets are now pricing in a 65% probability of negative rates by September's meeting. Technical indicators show USD/CHF breaking above the 0.9100 resistance level, with next targets at 0.9175 and 0.9200. EUR/CHF also surged 0.6% to 0.9875. The dovish stance contrasts sharply with other major central banks, potentially establishing a new carry trade dynamic favoring USD longs against CHF.