- USD/CHF gains ground to near 0.7695, bolstered by a firmer US Dollar.
- Iran’s national security chief said the country will not negotiate with the US.
- The US ISM Manufacturing PMI report for February is due later on Monday.
The USD/CHF pair gathers strength to around 0.7695 during the early European trading hours on Monday. The Greenback edges higher against the Swiss Franc (CHF) as the hotter US January Producer Price Index (PPI) report reinforced the case that the Federal Reserve (Fed) will hold interest rates steady at its upcoming March meetings.
Data released by the Bureau of Labor Statistics on Friday showed that headline PPI rose 0.5% MoM in January, compared to 0.4% in December. This figure came in above the market consensus of 0.3%. Additionally, the core PPI, which excludes volatile food and energy prices, climbed 0.8% MoM in January versus 0.6% prior, better than the forecast of 0.3%.
Markets largely expect the Fed to leave the interest rate unchanged until the summer, though US President Donald Trump has pushed for lower rates.
On the other hand, the CHF receives some support from its safe-haven status following joint US-Israeli strikes in Iran over the weekend, which reportedly killed Supreme Leader Ayatollah Ali Khamenei. Trump said on Monday that combat operations will continue in Iran until America’s objectives are met.
Meanwhile, Iran’s national security chief, Ali Larijani, said the country will not negotiate with the US, in response to reports that he reached out to Washington via Oman mediators, per Bloomberg.
Traders brace for the ISM Manufacturing Purchasing Managers Index (PMI) report for February, which will be released later on Monday. In case of a stronger-than-expected outcome, this could lift the Greenback against the CHF.
