The USD/CHF pair edged lower to around 0.8170 during Asian trading hours on Monday, reversing some gains from the previous session. The Swiss Franc strengthened due to rising safe-haven demand amid escalating tensions in the Middle East.
On Saturday, US President Donald Trump claimed that US forces had “obliterated” Iran’s main nuclear sites at Fordow, Natanz, and Isfahan in coordinated strikes with Israel. This military action has increased geopolitical risks, with Iran promising to defend itself, further driving demand for the Swiss Franc.
Economic data from Switzerland showed a sharp drop in the trade surplus, falling to CHF 2.0 billion in May from a revised CHF 5.4 billion in April. This marks the smallest surplus since December 2023. Traders are now awaiting the ZEW Survey Expectations for June and the Swiss National Bank’s Quarterly Bulletin for Q2, both due on Wednesday.
In the US, Federal Reserve Governor Christopher Waller indicated on Friday that the central bank might begin easing monetary policy as early as next month in response to global economic uncertainty and geopolitical risks. However, Fed Chair Jerome Powell recently cautioned that the Fed would maintain current interest rates until further improvements in labor and inflation data are seen, keeping the policy outlook uncertain.
