THE ETERNAL SOVEREIGN

Tag: USD/CHF

  • USD/CHF hovers just above 0.7700 as traders await Switzerland’s Trade Balance figures.

    USD/CHF remains under pressure as the Swiss franc benefits from safe-haven inflows amid ongoing geopolitical tensions.

    The pair trades near 0.7720 in Asian session dealings on Thursday, holding in negative territory after trimming earlier losses. The franc draws support from persistent strains between the United States and Iran, as well as stalled Russia-Ukraine negotiations. Investors are also looking ahead to Switzerland’s Trade Balance and Industrial Production figures due later in the day.

    Additional support for the Swiss currency stems from expectations that the Swiss National Bank (SNB) will keep policy accommodative in the near term. January inflation in Switzerland came in at 0.1%, staying at the lower edge of the SNB’s 0–2% target band and matching its first-quarter forecasts, reinforcing market views.

    SNB President Martin Schlegel recently noted that the central bank can tolerate brief periods of negative inflation while prioritizing medium-term price stability, adding that the threshold for a return to negative interest rates remains high.

    Still, downside in USD/CHF may be limited as the US dollar stabilizes after rising more than 0.5% in the previous session, supported by hawkish Federal Reserve meeting minutes. The January FOMC minutes rekindled expectations that rates could be raised again if inflation remains persistent. While most policymakers favored keeping rates unchanged, only a small number supported cuts, and officials indicated a willingness to ease policy should inflation moderate as anticipated.

    Sources: Akhtar Faruqui

  • USD/CHF falls to around 0.7950 amid safe-haven buying of Swiss Franc

    • USD/CHF declines as the Swiss franc benefits from increased safe-haven demand.
    • President Trump stated that Iran has expressed interest in negotiations following his military warnings, though he cautioned that action might occur prior to any talks.
    • Safe-haven demand intensifies amid growing concerns over the Federal Reserve’s independence.

    USD/CHF declined for the second consecutive day, trading near 0.7970 during Tuesday’s Asian session. The pair weakened as the Swiss Franc gained support from safe-haven demand driven by geopolitical tensions and worries over the Federal Reserve’s independence.

    On Sunday, U.S. President Donald Trump stated that Iran’s leadership had contacted him to seek negotiations following his military threats amid ongoing anti-government protests in the country. However, Trump cautioned that action might be taken before any formal meeting occurs.

    Safe-haven demand has risen amid growing concerns over the Federal Reserve’s independence after federal prosecutors threatened to indict Chair Jerome Powell regarding his congressional testimony on a building renovation—an action Powell called an attempt to undermine the central bank’s autonomy.

    However, downside pressure on the USD/CHF pair may be limited as the US Dollar maintains strength ahead of the December Consumer Price Index (CPI) release later in the day, which could provide new insights into the Fed’s policy direction.

    Markets currently expect two rate cuts from the Federal Reserve this year, beginning in June, though a stronger-than-expected inflation report could reduce the likelihood of easing. December’s Nonfarm Payrolls (NFP) came in below expectations, supporting a more dovish Fed stance. According to the CME Group’s FedWatch tool, there is a 95% chance that the Fed will keep interest rates unchanged at its January 27–28 meeting based on fed funds futures pricing.

    Sources: Fxstreet