USD/CHF, Markets Await Confirmation of US-Iran Ceasefire
USD/CHF strengthened slightly during Friday's Asian session, trading around 0.7840 after recording a small decline the previous day. The pair's movement was supported by a strengthening US dollar amid market caution regarding geopolitical risks in the Middle East, but its gains were tempered by solid Swiss economic data.
MUFG Bank believes the dollar could strengthen if Washington and Tehran fail to finalize a ceasefire extension. Logically, the unresolved conflict risks increasing global inflationary pressures, pushing up US Treasury yields, and shifting the Fed's internal consensus toward a more hawkish stance in response to rising prices.
On the geopolitical front, the US and Iran are reported to have reached a tentative agreement to extend the ceasefire by 60 days, potentially supporting smooth shipping through the Strait of Hormuz, including a plan to clear naval mines within 30 days. However, the market is likely to temper its euphoria after reports that President Donald Trump has not yet agreed to final terms, while Vice President JD Vance stated that Washington is "not there yet" on a final agreement despite being close.
Meanwhile, the Swiss franc received support from domestic economic resilience. Swiss non-farm payrolls rose 0.5% year-on-year in the first quarter of 2026 to 5.537 million, with the services sector growing 0.6% and industry rebounding by 0.1% after contracting in the previous quarter. Investor sentiment also improved, as evidenced by the UBS & CFA Society Switzerland survey, which rose to -11.1 in May 2026 from -30.3 in May 2025. Market focus will now focus on the final confirmation of the ceasefire, developments in the Strait of Hormuz, and the direction of US yields and Fed policy expectations, all of which could potentially shift support for USD/CHF. (asd)
Source: Newsmaker.id
