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- USD/CHF weakens to around 0.7950 in Wednesday’s early European session.
- Venezuela turmoil boosts the safe-haven demand, supporting the Swiss Franc.
- Fed governor Miran said ‘aggressive’ rate cuts are needed.
The USD/CHF pair trades in negative territory near 0.7950 during the early European session on Wednesday. The US Dollar (USD) weakens against the Swiss Franc (CHF) amid persistent geopolitical tensions and dovish comments from the US Federal Reserve (Fed) officials. Traders will keep an eye on the US ISM Services Purchasing Managers Index (PMI) report later on Wednesday.
The US military conducted a major operation in Caracas, capturing Venezuelan President Nicolás Maduro and his wife on Saturday. They were transported to the United States and appeared in a New York federal court on Monday, pleading not guilty to narco-terrorism, weapons, and corruption charges. Following the operation, US President Donald Trump declared that the US is “in charge” and would “run” Venezuela for a transition period.
The Wall Street Journal reported on Wednesday that Russia has deployed a submarine and other naval vessels to escort an aging oil tanker off the coast of Venezuela. Traders will closely monitor the developments surrounding Venezuela’s turmoil. Any signs of escalating tensions between the US and Venezuela could boost the safe-haven flows, benefiting the CHF against the Greenback.
Furthermore, dovish signals from the US central bank might weigh on the USD. Fed governor Stephen Miran, whose term ends at the end of January, noted on Tuesday that the Fed needs to cut interest rates aggressively this year to keep the economy moving forward. Meanwhile, Minneapolis Fed President Neel Kashkari stated that he sees a risk that the jobless rate could “pop” higher.
