USD/CHF pair loses ground to near 0.8530 during the early European session on Thursday. The US Dollar (USD) weakens against the Swiss Franc (CHF) amid the escalating trade tension between the US and China, the world's two largest economies.
President Donald Trump announced a 90-day pause on many new tariffs on trading partners to 10% to allow trade negotiations with those countries. However, US-China trade relations have reached a crisis level, with Trump raising tariffs to 125% on Chinese imports on Thursday, up from the 104% implemented just a day earlier.
Escalating trade war between the world's top two economies could slow their growth down, or even push them into recession. This, in turn, might harm other countries' economies in the form of slower global growth. The economic uncertainty and fears of potential global recession boost the safe-haven demand, benefiting the CHF.
The US March Consumer Price Index (CPI) inflation report will be closely monitored later on Thursday. The headline CPI is expected to show an increase of 2.6% YoY in March, while the core CPI is estimated to show a rise of 3.0% during the same reported period. If the report shows a hotter than expected outcome, this could lift the Greenback in the near term.
Source: fxstreet
