- USD/CHF strengthens to near 0.7965 in Friday’s early European session.
- Trump is reported to be shifting to dealmaking mode on China.
- Concerns over the Fed’s independence might drag the US Dollar lower.
The USD/CHF pair trades on a positive note around 0.7965 during the early European session on Friday. Optimism surrounding US trade deals provides some support to the Greenback. However, the upside for the pair might be limited as markets might turn cautious ahead of crucial events next week.
The Wall Street Journal (WSJ) reported on Friday that US President Donald Trump is now pursuing dealmaking with China. Trump might shift from a strategy of pressure to negotiation, with the goal of securing an economic agreement that will increase US access to Chinese markets, particularly in business and technology. These positive developments ease fears of trade tensions between the world’s two largest economies and undermine the safe-haven currency, like the Swiss Franc (CHF).
Late Thursday, Trump added to the pressure on Fed Chair Jerome Powell with a visit to the Fed’s Washington offices. Trump and Powell discussed the costs of ongoing renovations at the Fed’s headquarters. Any surprise move that escalates tensions between the administration and the US central bank could drag the US Dollar (USD) lower against the CHF in the near term.
The US Durable Goods Orders for June will be released later on Friday. All eyes will be on the Federal Open Market Committee (FOMC) policy meeting next week. The FOMC is anticipated to leave the rate unchanged at its July meeting as policymakers prefer to wait for clarity on the expected impact of tariffs on inflation. Financial markets have priced in nearly a 60% chance of a 25 basis points (bps) September rate cut, according to the CME FedWatch tool.
