CHF

• USD/CHF edges down to near 0.7985 as the US Dollar faces slight selling pressure.
• A fresh de-escalation in the Middle East war has diminished the safe-haven demand of the US Dollar.
• US President Trump is willing for peace with Iran without the opening of the Strait of Hormuz.

The USD/CHF pair ticks lower to near 0.7985 during the Asian trading session on Tuesday, struggling to extend its five-day winning streak, as the US Dollar (USD) faces slight selling pressure on reports that United States (US) President Donald Trump is willing to make peace with Iran without forcing the reopening of the Strait of Hormuz.

During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades subduedly around 100.40.

Earlier in the day, a report by the Wall Street Journal (WSJ) showed that US President Trump is ready for peace with Iran, as Washington has cripped its military infrastructure. Trump added that Washington would pursue diplomatic ways for the Hormuz reopening, as a forceful way to reopen the waterways would stretch the conflict beyond his timeline of four to six weeks.

US President Trump’s call for a truce has improved the risk appetite of investors, resulting in a strong demand for riskier assets across the world. S&P 500 futures trade almost 1% higher above 6,400, as of writing.

A fresh de-escalation in Middle East conflicts has also resulted in a sharp correction in the oil price, which could weigh on hawkish Federal Reserve (Fed) bets that were accelerated due to higher energy prices-led de-anchored inflation expectations.

Meanwhile, the Swiss Franc (CHF) trades marginally higher against a majority of its currency peers. Broadly the Swiss currency has been under pressure as the Swiss National Bank (SNB) expressed, in the monetary policy announcement this month, readiness to intervene against excessive appreciation in the CHF.

• USD/CHF appreciated after the Swiss KOF Leading Indicator fell to 96.1 in February.
• SNB may intervene in FX markets to curb excessive CHF strength and maintain price stability.
• The US Dollar may strengthen on rising safe-haven demand amid fears of a potential US ground invasion in Iran.

USD/CHF continues its winning streak for the fifth successive day, trading around a two-month high of 0.8000 during the early European hours on Monday. The pair recovers its daily losses following the release of the Swiss KOF Leading Indicator, which fell to 96.1 in February, from 103.8 (revised from 104.2) in January.

However, the downside of the USD/CHF pair could be restrained as the Swiss Franc (CHF) may face challenges as Swiss National Bank (SNB) Chair Martin Schlegel expressed the SNB’s readiness to intervene in FX markets to curb sharp and excessive currency swings and safeguard price stability. Additionally, SNB board member Petra Tschudin also emphasized the central bank’s increased willingness to step in and limit further strength in the Swiss Franc.

Moreover, the US Dollar (USD) may regain its ground against the major peers amid increased safe-haven demand, which could be attributed to fears of a potential United States (US) ground invasion in Iran.

A Wall Street Journal (WSJ) report suggested last week that the US Pentagon could deploy 10,000 additional troops to Iran. In response, Ebrahim Zolfaqari issued a stark warning on Iranian state TV, stating that “US troops will be good food for sharks of the Persian Gulf.”

Iran-backed Houthi forces in Yemen launched their first strikes on Israel over the weekend, widening the regional conflict and warning that attacks will continue until operations against Iran and its allies cease. The group also threatens Red Sea shipping routes and key Saudi energy infrastructure, heightening risks to global supply.

US economic data releases this week, including various labor market-linked indicators, particularly the Nonfarm Payrolls (NFP), as well as the ISM Purchasing Managers’ Index (PMI), are expected to influence market expectations for the Federal Reserve (Fed) monetary policy outlook.

• USD/CHF ticks higher to near 0.7925 as the US Dollar continues to trade firmly.
• Iran called Trump’s 15-point plan “extremely maximalist and unreasonable”.
• The SNB could intervene against excessive appreciation in the Swiss Franc.

The USD/CHF pair ticks higher to near 0.7925 during the European trading session on Thursday. The Swiss Franc pair gains as the US Dollar (USD) holds onto gains amid growing doubts over an early ceasefire between the United States (US) and Iran, following the release of Tehran’s conditions.

During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades firmly near Wednesday’s high around 99.70.

According to a report from the Wall Street Journal (WSJ), Tehran has also called for a new order in the Strait of Hormuz that would allow it to collect transit fees, as well as guarantees that the war would not restart, an end to Israeli strikes on Hezbollah, and no interference in Tehran pursuing missile program. In response, a US official has described the demands as “ridiculous and unrealistic”.

Before Tehran’s conditions, US President Donald Trump proposes a month-long ceasefire and a 15-point settlement plan delivered through Pakistan to Iran, which was rejected by Tehran, calling it “extremely maximalist and unreasonable”, by a senior Iranian official while speaking with Al Jazeera.

The uncertainty over the outlook of the Middle East war is expected to keep underpinning the demand for safe-haven assets, such as the US Dollar.

Meanwhile, the Swiss Franc (CHF) trades almost flat against its major currency peers, while the Swiss National Bank (SNB) has expressed readiness to intervene in foreign markets against excessive appreciation in the domestic currency.

SNB Chairman Martin Schlegel said in his press conference post the monetary policy announcement, “We have increased our readiness to intervene in forex markets to dampen rapid Swiss Franc appreciation.”