The USD/CHF pair faced selling pressure during the Asian session on Thursday, ending a three-day rally that saw it peak around 0.9055. The pair is now trading near the lower end of the daily range, around 0.9025, and appears vulnerable to further declines.
US President Donald Trump’s announcement on Wednesday that he would impose tariffs on various products as early as next month has sparked fears of an escalating global trade conflict. This has dampened investor appetite for riskier assets, contributing to a broader risk-off sentiment that has boosted traditional safe-haven currencies, including the Swiss Franc (CHF). Additionally, some USD selling is putting downward pressure on the USD/CHF pair.
As the global flight to safety continues, US Treasury yields have fallen, overshadowing the hawkish stance expressed in the latest Federal Open Market Committee (FOMC) meeting minutes. This shift has prevented the US Dollar Index (DXY) from maintaining its recovery after dipping to a two-month low earlier this week.
While the overall market sentiment is weighing on the Greenback, expectations that the Federal Reserve may pause rate hikes for a prolonged period could lend support to the USD, keeping the USD/CHF pair on watch.
Traders will be looking for a decisive move lower before confirming that the pair’s recovery from the 0.8970-0.8965 support zone—the year-to-date low—has lost momentum. Attention will also be on Thursday’s US economic data, including the Weekly Initial Jobless Claims and the Philly Fed Manufacturing Index, with speeches from key FOMC members potentially influencing USD price dynamics and the USD/CHF outlook.
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