The USD/CHF pair extended its losing streak for the second consecutive day, trading near 0.8960 during Tuesday’s Asian session as the Swiss Franc (CHF) gained traction amid escalating global trade tensions and risk-averse market sentiment.
Tariff Disputes Fuel Market Uncertainty
Market anxiety heightened after the White House confirmed that President Donald Trump signed an executive order imposing 20% tariffs on Chinese imports. While similar measures for Mexico and Canada remain pending, Trump reiterated that reciprocal tariffs would take effect on April 2 against countries imposing duties on US goods.
Canada swiftly announced that it would impose 25% retaliatory tariffs on US imports starting Tuesday if Washington’s tariffs proceed. Meanwhile, China’s Commerce Ministry vowed to implement “necessary countermeasures” to safeguard its economic interests.
Safe-Haven Demand Boosts Swiss Franc
The escalating tariff war bolstered demand for the safe-haven Swiss Franc, adding downward pressure on USD/CHF. Although the US Dollar Index (DXY) climbed to approximately 106.60, the Greenback’s upside remained capped as optimism over a potential Ukraine peace deal dampened demand for safe-haven assets.
European leaders’ support for security guarantees for Ukraine further buoyed global risk sentiment, contributing to the Swiss Franc’s strength.
US Economic Data in Focus
US economic data presented mixed signals. The ISM Manufacturing PMI slipped to 50.3 in February, falling short of the 50.5 forecast and down from 50.9 in January. However, S&P Global’s final Manufacturing PMI surpassed expectations at 52.7, improving from its preliminary estimate.
Investors now await key US labor market data, with the ADP employment report set for release on Wednesday and the Nonfarm Payrolls report on Friday, which could offer further insight into the Federal Reserve’s monetary policy outlook.
Technical Outlook
USD/CHF remains vulnerable below the psychological level of 0.9000. Immediate support lies at 0.8925, with a break below this level potentially triggering further declines toward 0.8880. On the upside, resistance is seen at 0.8990, followed by the 50-day Exponential Moving Average (EMA) at 0.9040.
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