The USD/CHF currency pair continues its downward trend, nearing the 0.8435 mark during the early European trading session. The Swiss Franc (CHF) has strengthened against the US Dollar (USD) as investors flock to safer assets amid escalating global market uncertainty, triggered by US President Donald Trump’s controversial tariffs and mounting concerns over a potential global recession.
As fears of an economic slowdown and a looming recession in the United States intensify, the US Dollar faces selling pressure. Traders are increasingly pricing in expectations of further rate cuts by the Federal Reserve (Fed) in 2025. According to the CME FedWatch tool, markets have assigned a nearly 65% probability to a rate cut in May, with futures indicating up to 100 basis points of cuts by December.
In a statement late Tuesday, US Customs and Border Protection revealed plans to start collecting country-specific tariffs from 86 trade partners. Despite receiving requests for tariff relief from various nations, President Trump emphasized that he was not considering pausing the implementation of additional tariffs. However, he left open the possibility of future negotiations. This uncertainty surrounding US trade policy, coupled with fears of a global recession, has contributed to increased demand for the Swiss Franc, traditionally viewed as a safe-haven currency.
Trump’s announcement of reciprocal tariffs for most global economies, including higher levies on Switzerland compared to the European Union and the UK, sent shockwaves through financial markets. In response, economists revised their forecasts for Swiss economic growth, anticipating that the Swiss National Bank (SNB) will be prompted to lower interest rates once again. Market expectations are leaning towards a 25 basis point rate cut by the Swiss central bank, according to data from LSEG.
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