- USD/CHF gains ground to around 0.8995 in Friday’s early European session.
- Trump said tariffs on Mexico and Canada will go into effect on March 4.
- The risk-off mood and safe-haven flows could boost the Swiss Franc and cap the pair’s upside.
The USD/CHF pair trades in positive territory near 0.8995 during the early European session on Friday. The Greenback jumps after US President Donald Trump’s latest tariff comments. The US Personal Consumption Expenditures (PCE) Price Index for January will be the highlight on Friday.
The US Dollar jumps after Trump said that 25% tariffs on Mexican and Canadian goods will go into effect on March 4 as scheduled because drugs are still pouring into the United States from those countries. Trump added that goods from China will be subject to an extra 10% duty.
The path of interest rate cuts by the Federal Reserve (Fed) has become less clear, with markets pricing in 58 basis points (bps) of easing by year-end. Cleveland Fed President Beth Hammack said she expects US central bank interest rate policy is on hold for the time being. Philadelphia Federal Reserve Bank President Patrick Harker expressed support for continuing to hold the interest rate in the current range.
On the Swiss front, the softer Consumer Price Index (CPI) data for January has triggered expectations of further rate cuts by the Swiss National Bank (SNB) in March. Inflation eased to 0.4%, its lowest level in nearly four years. Meanwhile, the uncertainty and escalating geopolitical tensions in the Middle East could boost the safe-haven flows, benefiting the Swiss Franc (CHF).
