- USD/CHF attracts some sellers to near 0.7725 in Monday’s early European session.
- The Swiss Franc strengthens against the US Dollar amid tariff uncertainty.
- Traders will closely monitor the developments surrounding the US-Iran talks on Thursday ahead of the US PPI report.
The USD/CHF pair faces some selling pressure to around 0.7725 during the early European session on Monday. US President Donald Trump’s fresh tariff plans weigh on the Greenback against the Swiss Franc (CHF). Traders brace for the US January Producer Price Index (PPI) report on Friday for fresh impetus.
The US Supreme Court struck down Trump’s sweeping reciprocal tariffs on Friday. In response, the US President announced plans for a new 15% global import tariff, fueling concerns over a renewed trade war.
“The dollar is enduring a broad-based decline as the market tries to assess implications from the court’s decision,” said Rodrigo Catril, strategist at National Australia Bank in Sydney. “Trump’s tariff regime is still in place with more uncertainty.”
Ongoing tensions between the US and Iran, including reports of potential limited airstrikes, boost the safe-haven flows, benefitting the CHF, and create a tailwind for the pair. The New York Times reported on Sunday that Trump is considering launching limited airstrikes against Iran.
Trump added that he might consider a far larger attack in the upcoming months if diplomacy or any initial targeted US attack fails to convince Iran to comply with his demands that it abandon its nuclear program. The US and Iran will hold their next round of negotiations in Geneva on Thursday. But Trump weighs options for US action if the negotiations fail.
The release of the US January PPI data on Friday could offer some hints about the US interest rate path. If the report comes in hotter than expected, this would prompt traders to scale back expectations for interest rate cuts by the Federal Reserve (Fed), lifting the US Dollar (USD).
