With the Middle East situation still unfolding and risk sentiment swinging between complacency and panic, USDCHF offers a unique tactical angle. The franc has historically been one of the purest geopolitical hedges and unlike the yen, it’s not weighed down by a dovish central bank or yield compression.

If the conflict between Israel and Iran escalates especially with any direct hit on oil infrastructure markets could quickly move out of risk assets and into safer territory. USDCHF tends to benefit from this kind of environment, especially as it’s not being distorted by the same carry trade mechanics we see in JPY.

This trade also acts as a smart hedge if your long USDJPY starts getting squeezed by risk-off yen demand. In that case, USDCHF can absorb some of the shock while still aligning with a broadly bullish USD bias.

LONG USDCHF

Jun 18 2025