USD/CHF Drops, Franc Strengthens on Tariff & Iran Risks
USD/CHF weakened to around 0.7725 in early European trading on Monday, as the Swiss Franc (CHF) strengthened as a safe-haven asset. This weakening occurred as the US dollar was pressured by uncertainty over the latest US tariff policy.
The main trigger came from the tariff drama: after the US Supreme Court overturned Trump's "reciprocal" tariffs, President Donald Trump responded with a plan to impose 15% tariffs on global imports. This move reignited trade war concerns, causing the market to reduce exposure to the dollar and shift to defensive assets like the CHF.
The safe-haven sentiment was also bolstered by geopolitical tensions. Markets were monitoring US-Iran tensions, including reports that Trump was considering the option of limited airstrikes if diplomacy failed. The next round of negotiations between the US and Iran is scheduled to take place in Geneva on Thursday, so headlines related to the talks have the potential to trigger volatility in safe-haven currencies.
The next focus is on the US Producer Price Index (PPI) data for January, released on Friday. If the PPI is hotter than expected, the market could reduce expectations for a Fed rate cut—which typically supports the dollar—and give USD/CHF a chance to rebound. Conversely, if the data softens, pressure on the dollar could persist, and the CHF could still benefit. (asd)
Source: Newsmaker.id
