USD/CHF: SNB's Limited Tools to Combat Franc Strength

USD/CHF remains under pressure near 0.8400 as the Swiss National Bank confronts limited options to weaken the persistently strong franc. The Swiss currency has gained 8% against the dollar year-to-date, with EUR/CHF also sliding to multi-year lows near 0.9350. The SNB's traditional intervention tools are constrained by global inflation concerns and the franc's role as a premier safe-haven asset. Currency interventions risk importing inflation into Switzerland's economy, while negative rates are politically unfeasible. The US Dollar Index has weakened 2.5% this month, compounding pressure on USD/CHF. Technical analysis shows the pair testing critical support at 0.8380, with a break below potentially accelerating losses toward 0.8300. Resistance stands at 0.8480 and 0.8520. Traders should prepare for continued franc strength unless the SNB signals tolerance limits or global risk sentiment improves significantly, reducing safe-haven demand.