USD/CHF eyes SNB decision as franc strength builds on rate hold expectations

USD/CHF trades near 0.8850 ahead of the Swiss National Bank's monetary policy decision, with markets expecting rates to remain at 0.00%. The franc has gained 0.2% against the dollar this week as traders position for a hawkish hold from the SNB. Despite recent disappointing Swiss inflation data showing CPI at 1.2% year-over-year, below the central bank's target, SNB officials have repeatedly stated that the threshold for implementing negative rates remains extremely high. This stance contrasts with other major central banks actively considering rate cuts, potentially supporting CHF strength. Technical indicators show USD/CHF testing support at 0.8845, with resistance at 0.8890. A break below current levels could accelerate franc gains toward 0.8800, while any surprise dovish tilt from the SNB could quickly reverse CHF strength and push the pair back above 0.8900.