USD/CHF Strengthens, US-Swiss Trade Tensions in Focus
The USD/CHF currency pair traded higher around 0.8090 on Tuesday morning European time. The US dollar strengthened against the Swiss franc after US President Donald Trump surprisingly imposed 39% export tariffs on Swiss goods. This move pressured the franc due to concerns about the impact on Switzerland's main exports.
The Swiss government responded by stating its readiness to provide a "more attractive offer" in trade talks with Washington. However, it remains unclear whether the two countries can reach an agreement before the deadline. This uncertainty has added selling pressure on the CHF and pushed USD/CHF higher.
However, the USD's strength is likely limited by expectations of a Fed interest rate cut in September. US employment data released last Friday showed weakness, with the Nonfarm Payrolls (NFP) report coming in below expectations. This has fueled speculation that the Fed will cut interest rates by 25 basis points at its upcoming meeting.
San Francisco Fed President Mary Daly also emphasized that the weakening labor market and minimal tariff-driven inflation are compelling reasons to cut interest rates. If this trend continues, the potential for the US dollar to strengthen against the franc could be limited in the near term. (ayu)
Source: Newsmaker.id
