US Tariffs Drive Risk-Off, USD/CHF Nears Lows
USD/CHF extended its decline for the fifth consecutive day and held near 0.7720 in Asian trading on Thursday. Pressure on the pair arose as the Swiss franc returned to defensive status, as market sentiment worsened due to escalating trade tensions and increased interest in safe-haven assets.
From the US side, market sensitivity returned after President Donald Trump pushed ahead with his 10% tariff agenda against trading partners, despite the Supreme Court partially limiting the previous tariff framework. In his State of the Union address, Trump assessed the US economy as improving and defended tariffs as a growth driver, but the rapidly changing policy narrative kept market participants cautious and supported demand for defensive currencies like the CHF.
In Switzerland, the franc also received support as the market perceived the SNB to be in no rush to cut interest rates. Low Swiss inflation (around 0.1% in January) remains under pressure, but the central bank believes price stability is seen over the medium term and current policy conditions are relatively appropriate. Several Swiss releases and sentiment surveys also fueled the perception that the SNB's interest rate will likely remain on hold for longer.
Looking ahead, market attention will be on Swiss employment data released today and fourth-quarter GDP on Friday, which will provide clues to the strength of the domestic economy. In the US, the focus shifts to weekly jobless claims, as labor indicators remain key to shaping expectations for the Fed's policy direction—and ultimately, the short-term direction of USD/CHF. (alg)
Source: Newsmaker.id
