- USD/CHF softens to around 0.8230 in Friday’s early European session.
- Persistent trade-related uncertainties boost the safe-haven flows, supporting the Swiss Franc.
- US April Personal Consumption Expenditures (PCE) Price Index report will take center stage later on Friday.
The USD/CHF pair loses ground to near 0.8230 during the early European session on Friday. The Swiss Franc (CHF) edges higher against the US Dollar (USD) due to persistent trade-related uncertainties.
A federal appeals court late Thursday temporarily paused a sweeping ruling against US President Donald Trump’s global tariffs while it takes more time to consider the administration’s request for a longer-lasting hold. Moreover, the Wall Street Journal (WSJ) reported that “US President Donald Trump’s administration is considering an existing law that includes language allowing for tariffs of up to 15% for 150 days.”
However, Trump has not made a final decision. The administration’s unpredictable policy, along with the geopolitical tensions in the Middle East and the ongoing Russia-Ukraine war, could support a safe-haven currency like the CHF and create a headwind for the pair.
Following five consecutive rate cuts, the Swiss National Bank (SNB) is anticipated to cut its benchmark rate to 0% at the upcoming policy meeting on June 19. That would end a period of positive monetary policy, the lowest in almost three years. SNB President Martin Schlegel said that the Swiss central bank would go sub-zero if needed. That doesn’t appear imminent for now, with only a handful of SNB policymakers expecting such a move this year.
Traders await the US April Personal Consumption Expenditures (PCE) Price Index report due later on Friday for fresh impetus. Also, the final reading of the Michigan Consumer Sentiment and the Chicago of Purchasing Managers Index (PMI) will be published. If the reports showed better-than-expected outcomes, this could lift the USD in the near term.
