USD/CHF extends its winning streak for the fourth consecutive session, trading near 0.8840 during Asian hours on Monday. The pair gains as the US Dollar (USD) recovers its daily losses, supported by rising Treasury yields amid a hawkish tone surrounding the Federal Reserve (Fed). Last week, Fed Chair Jerome Powell noted, "Labor market conditions are solid, and inflation has moved closer to our 2% longer-run goal, though it remains somewhat elevated."
The US Dollar Index (DXY), which measures the USD against six major currencies, continues to rise, hovering around 104.10. Meanwhile, yields on US 2-year and 10-year Treasury bonds stand at 3.97% and 4.28%, respectively.
However, the USD faced some pressure amid concerns over a potential US economic slowdown, driven by trade policies under President Trump. Investors now await the preliminary reading of the US S&P Global PMI data for March, set for release later in the North American session.
The Swiss Franc (CHF) may be under downward pressure due to improved risk sentiment, reducing demand for safe-haven assets. This shift follows reports that the White House is adjusting its tariff strategy ahead of the April 2 implementation, according to the Wall Street Journal. Additionally, geopolitical tensions have eased, with Ukrainian and US officials meeting in Riyadh on Sunday to discuss peace efforts, while President Trump continues to advocate for an end to the three-year war.
The Swiss National Bank (SNB) lowered its key policy rate to 0.25% on Thursday, its lowest level since September 2022. Although the move was widely anticipated, the SNB refrained from committing to a specific policy path. Policymakers emphasized that lower borrowing costs are necessary to align monetary conditions with subdued inflationary pressure.
Source: Fxstreet
