Swiss Franc steadies above 0.7800 as traders brace for US PPI data, Trump-Xi summit
Oleh Lallalit Srijandorn
Dikemas kini: 13 May 2026
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The USD/CHF pair trades on a flat note around 0.7805 during the early European trading hours on Wednesday. Traders await the key US inflation data and continue to assess the developments surrounding US-China talks later this week.
- USD/CHF flat lines near 0.7805 in Wednesday’s early European session.
- Chinese and US leaders will hold talks in Seoul ahead of a high-profile leaders’ summit.
- SNB is expected to hold rates at zero through 2026, according to Reuters poll.
The USD/CHF pair trades on a flat note around 0.7805 during the early European trading hours on Wednesday. Traders await the key US inflation data and continue to assess the developments surrounding US-China talks later this week.
The South China Morning Post reported on Wednesday that US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will hold trade and economic talks in South Korea ahead of US President Donald Trump's official visit to China.
The Trump-Chinese President Xi Jinping summit will take place in Beijing on Thursday and Friday. Earlier on Tuesday, Trump said that he would prioritize trade discussions during his summit with Chinese President Xi Jinping, and downplayed the amount of attention they would devote to the Iran war.
The US Producer Price Index (PPI) report will take center stage later on Wednesday. Markets expect the headline US PPI to show a rise of 4.9% YoY in April, compared to 4.0% in March, while the core PPI is projected to show an increase of 4.3% YoY in April versus 3.8% prior. Any signs of hotter inflation in the US could fuel bets on Federal Reserve (Fed) interest rate hikes later this year, which support the Greenback against the Swiss Franc (CHF).
The Swiss National Bank (SNB) has kept its policy rate unchanged at 0%. Reuters economists predict rates will hold at zero throughout the remainder of 2026, forcing the bank to rely primarily on currency intervention to control Franc strength.
"The SNB is not willing to introduce negative rates at this stage as the bar remains higher than back in 2015 ... We continue to expect the SNB to remain on hold for the foreseeable future," said Nikolay Markov, lead economist at Pictet Asset Management.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
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