USD/CHF hovers above 3-month low on safe haven flows

Key moments

• USD/CHF at lows not seen since early December 2024
• US data string now eyed for clues on macroeconomic conditions, Fed rate cut path
• Swiss consumer morale worsens in February

The USD/CHF currency pair registered a fresh 3-month low on Monday, as the Swiss Franc drew support from safe haven flows amid ongoing US tariff uncertainty.

Escalating trade tensions between the United States, its neighbors and China, along with retaliatory measures from the affected countries, have created an environment of uncertainty that weighed on investor risk sentiment.

US President Trump imposed tariffs on key trading partners, and then, delayed some of them for one month, which spurred concerns over a US economic slowdown.

In an interview with Fox News over the weekend, Trump abstained from predicting if the US could be heading towards a recession amid stock market worries about tariff actions on Mexico, Canada and China.

That pushed 10-year US Treasury yield lower and also mounted pressure on the greenback.

The US Dollar hovered above a multi-month low against major peers, after data showed on Friday that the US economy had added fewer than expected jobs last month.

The data implied the Federal Reserve was still on track to deliver multiple interest rate cuts this year. Markets are now pricing in at least three 25 basis point rate cuts for 2025. The first rate cut is likely to come as early as June.

This week, investors’ focus will likely set on the US job openings, CPI inflation and producer price inflation figures due on Tuesday, Wednesday and Thursday respectively.

Annual headline consumer inflation in the US probably eased to 2.9% in February, according to market consensus, from 3% in January – the highest rate since June 2024.

Annual core CPI inflation probably eased to 3.2% in February from 3.3% in January.

Meanwhile, in other data, Switzerland’s consumer morale has worsened in February. The index of consumer confidence came in at a reading of -34 in February, down from -29 in January and against market consensus of -28.

The USD/CHF currency pair was last losing 0.29% on the day to trade at 0.8769. Earlier, the major Forex pair went down as low as 0.8761, or its lowest level since December 9th 2024.