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- USD/CHF advances as the US Dollar finds support amid heightened market caution ahead of Trump’s tariff announcement on April 2.
- The Greenback benefits as 2-year and 10-year US bond yields rise to 4.01% and 4.33%, respectively.
- The Swiss Franc gained ground amid escalating geopolitical tensions in the Middle East.
The USD/CHF pair rebounds after two consecutive days of losses, trading around 0.8840 during Asian hours on Wednesday. The pair strengthens as the US Dollar (USD) finds support amid prevailing market caution ahead of US President Donald Trump’s upcoming tariff announcement on April 2.
The US Dollar Index (DXY), which measures the USD against six major currencies, recovers from recent losses and hovers around 104.30. The Greenback gains momentum as US Treasury yields rise, with the 2-year and 10-year bond yields standing at 4.01% and 4.33%, respectively, at the time of writing.
Hawkish remarks from Federal Reserve (Fed) Governor Adriana Kugler further bolster the USD. On Tuesday, Kugler reiterated that the Fed’s monetary policy remains restrictive and appropriately positioned. She also noted that progress toward the 2% inflation target has slowed since last summer, highlighting the recent rise in goods inflation as “unhelpful.”
Swiss National Bank (SNB) reported on Monday that Switzerland’s current account surplus narrowed to CHF 9.8 billion in Q4 2024, down from CHF 13.8 billion in the same period the previous year. Meanwhile, the services’ account deficit widened to CHF 9.4 billion from CHF 8.7 billion, while the goods account surplus grew to CHF 30 billion from CHF 27.9 billion a year earlier.
Additionally, geopolitical tensions in the Middle East could drive safe-haven demand for the Swiss Franc (CHF). Israel has resumed airstrikes in Gaza following a nearly two-month ceasefire with Hamas. Prime Minister Benjamin Netanyahu has vowed to escalate military operations to secure the release of hostages and dismantle Hamas.
