The USD/CHF currency pair is trading with modest losses around the 0.8860 mark during the early European session on Friday, as concerns over a potential escalation in the Russia-Ukraine conflict are fueling safe-haven demand for the Swiss Franc (CHF) against the US Dollar. Traders are also awaiting key economic data, including the flash US S&P Global Purchasing Managers Index (PMI) and the final Michigan Consumer Sentiment report, which could provide further direction.
Russian President Vladimir Putin announced on Thursday that Russia had launched a ballistic missile with a non-nuclear hypersonic warhead at the Ukrainian city of Dnipro. He also warned that Moscow could target any military facilities in countries that supply weapons to Ukraine, heightening geopolitical tensions. As the situation evolves, any increase in geopolitical risks is likely to support safe-haven assets like the Swiss Franc in the short term.
Meanwhile, expectations of a more cautious stance from the US Federal Reserve may offer some support to the US Dollar. On Thursday, Chicago Fed President Austan Goolsbee reiterated his backing for a slower pace of interest rate cuts, citing easing inflation and the Fed’s progress toward its 2% target. This shift in tone from the Fed could help maintain a stable outlook for the USD, balancing the impact of geopolitical developments.
As traders assess both geopolitical risks and monetary policy signals, the USD/CHF pair remains in a delicate balance, awaiting fresh economic data for clearer direction.
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