The USD/CHF pair continued its losing streak for the third consecutive session on Wednesday, sliding to a two-week low near the 0.8220–0.8215 range during the Asian session. The sustained downturn is driven by a combination of broad-based U.S. dollar weakness and renewed safe-haven demand for the Swiss Franc (CHF).
Persistent concerns over the fiscal health of the United States are weighing heavily on the dollar. Investor sentiment soured further following last Friday’s unexpected downgrade of the U.S. sovereign credit rating, amplifying pressure on the greenback. Compounding this bearish outlook are market expectations that the Federal Reserve will begin cutting interest rates later this year, as inflation continues to ease and the economic growth outlook remains tepid.
At the same time, geopolitical tensions are stoking demand for traditional safe-haven assets like the Swiss Franc. Hopes for a U.S.-China trade breakthrough faded abruptly after Washington issued new guidance cautioning companies against using Huawei’s Ascend AI chips. Beijing responded with strong criticism, accusing the U.S. of misusing export controls and violating international trade norms. China’s Commerce Ministry went further on Wednesday, labeling the U.S. actions as “unilateral bullying and protectionism,” intensifying fears of escalating trade frictions.
Outlook and Market Drivers
With no major U.S. economic data scheduled for release on Wednesday, investor attention will shift to public remarks from key Federal Open Market Committee (FOMC) officials. These speeches could offer further clues about the Fed’s policy direction and influence short-term USD flows.
In the broader context, risk sentiment and ongoing trade-related developments are expected to guide market behavior. Given the prevailing fundamental backdrop, the path of least resistance for USD/CHF appears skewed to the downside, with additional losses likely if dollar sentiment continues to erode and safe-haven demand for the CHF remains firm.
Traders should remain alert to geopolitical headlines and central bank commentary, which may drive volatility and open short-term trading opportunities in the USD/CHF pair.
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