- USD/CHF extends the rally to near 0.8970 in Thursday’s early European session.
- Global economic uncertainties and geopolitical tensions could boost the Swiss Franc.
- The estimate of the US Q4 GDP data will be in the spotlight later on Thursday.
The USD/CHF pair trades in positive territory for the second consecutive day around 0.8970 during the early European session on Thursday. A modest recovery in the US Dollar (USD) provides some support to the pair. The estimate of US Gross Domestic Product (GDP) for the fourth quarter (Q4) will take center stage later on Thursday.
The renewed levy of tariffs by US President Donald Trump on Canadian and Mexican imports has raised concerns about global trade tensions. Any signs of trade tensions, economic uncertainty and ongoing geopolitical tensions could drive demand for safe-haven currencies like the Swiss Franc (CHF) and create a headwind for USD/CHF.
Worries over US economic growth have boosted expectations that the Federal Reserve (Fed) would deliver at least two rate cuts this year. This, in turn, might cap the upside for the pair. US consumer confidence declined the most since August 2021, falling to 98.3 in February versus 105.3 prior, according to the Conference Board.
Meanwhile, New Home Sales in the US fell by 10.5% MoM to 657,000 units in January from 734,000 units (revised from 698,000) in the previous reading, according to the Commerce Department’s Census Bureau on Wednesday. This figure came in weaker than the 680,000 units expected. Investors will closely monitor the US Q4 GDP report, which is due later on Thursday. In case of a stronger-than-expected outcome, this could lift the Greenback.
