The US Dollar (USD) maintained its upward momentum against the Swiss Franc (CHF) for a second consecutive session on Wednesday, with the USD/CHF pair hovering near 0.8240 during the Asian trading hours. The Greenback’s resilience is partly attributed to a technical correction, though broader market forces—particularly the rising “Sell America” sentiment—could cap further gains.
Investors continue to monitor geopolitical developments, especially the anticipated meeting between US President Donald Trump and Chinese President Xi Jinping, which could potentially revive stalled trade negotiations. Optimism surrounding a resolution to the US-China tariff disputes may lift market sentiment, but relations remain tense. Both Washington and Beijing have accused each other of violating the temporary tariff truce agreed upon earlier this month, fueling renewed uncertainty.
On the US economic front, the Job Openings and Labor Turnover Survey (JOLTS) reported 7.39 million job openings in April, surpassing expectations of 7.1 million and marking an increase from March’s 7.2 million. The robust data signals ongoing strength in the US labor market.
Market focus now shifts to Wednesday’s ISM Services PMI, where a modest rebound in business sentiment is expected. Later this week, traders will turn their attention to Friday’s US Nonfarm Payrolls (NFP) report for May, with forecasts pointing to 130,000 new job additions.
However, safe-haven demand for the Swiss Franc may offset further gains in the USD/CHF pair, particularly amid escalating global trade frictions. The US administration’s decision to double tariffs on steel and aluminum imports—from 25% to 50%—came into effect at 04:00 GMT on Wednesday, further intensifying trade-related risks.
From Switzerland, economic signals have been mixed. Data released Tuesday showed that the Swiss Consumer Price Index (CPI) fell by 0.1% year-on-year in May—dipping below the Swiss National Bank’s (SNB) target range of 0–2% and marking the first deflationary reading since March 2021. Despite this, Monday’s GDP figures revealed that the Swiss economy expanded by 0.5% in the first quarter, improving from a revised 0.3% in Q4 2024, although missing the preliminary forecast of 0.7%.
With inflation softening and economic growth remaining moderate, expectations are rising that the SNB could implement a 25 basis point rate cut at its upcoming meeting—bringing the policy rate down to 0% from the current 0.25%. Market participants are also pricing in the possibility of a return to negative interest rates should the global economic outlook deteriorate further.
Technical Overview:
USD/CHF remains technically supported around the 0.8240 zone. A sustained move above this level could reinforce bullish momentum in the near term. However, potential rate cuts by the SNB and further geopolitical tensions will be key drivers influencing the pair’s direction in the coming sessions.
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