USD/CHF attracts some sellers below 0.8850 

• USD/CHF weakens to near 0.8845 in Monday’s early European session, losing 0.17% on the day. 
• Economic uncertainty and geopolitical risks boost the safe-haven flows, supporting the Swiss Franc.
• The Fed is expected to hold its benchmark Federal Funds Rate at a range of 4.25% to 4.5% on Wednesday. 

The USD/CHF pair attracts some sellers to around 0.8845 during the early European session on Monday. US President Donald Trump’s unpredictable trade policy and a series of weak US economic data weigh on the US Dollar (USD) against the Swiss Franc (CHF). Later on Monday, the US February Retail Sales data will be published. 

Optimism that the Trump administration would boost the economy turned into concerns that his trade policies might spark a recession. Data released on Friday indicated that the US Consumer Sentiment Index fell to a nearly 2-1/2-year low in March, but inflation expectations rose amid concerns about the impact of Trump’s sweeping tariffs, which have sparked a global trade war.

The US defense secretary said on Sunday that the United States will continue attacking Yemen’s Houthis until they stop attacks on shipping as the Iran-aligned group threatened to escalate in response to deadly US strikes the day before.

The escalating trade war between the US and many of its major trading partners, fears about the impact on economies across the world and rising geopolitical tensions in the Middle East could boost the CHF, a safe-haven currency and act as a headwind for the pair. 

The Federal Reserve (Fed) is widely anticipated to keep its interest rate steady at its March meeting on Wednesday. Fed officials, including Fed Chair Jerome Powell, emphasized that they’re taking a wait-and-see approach to interest rates since so many economic policies are up in the air.  Investors have priced in two quarter-point rate cuts this year starting in June or July, with a high likelihood of a third by year-end. However, any surprise hawkish comments from the Fed policymakers could lift the Greenback in the near term.