USD/CHF pulls back from one-week high

The USD/CHF currency pair was weaker on Thursday, pulling back from a 1-week peak of 0.9054, as US President Donald Trump’s tariff plans and a cautious approach from Federal Reserve policy makers prompted market players to reassess US interest rate outlook.

US President Trump announced this week sector-wide tariffs on pharmaceuticals and semiconductor chips would begin at “25% or higher.” The Trump administration also plans to impose similar tariffs on automobiles as early as April 2nd.

The minutes of the Federal Reserve’s January meeting showed policy makers had stressed on upside risks to inflation, resulting from potential shifts in trade and immigration policies, geopolitical disruptions to supply chains and stronger-than-expected household spending.

The high level of uncertainty warranted a cautious approach when considering further monetary policy adjustments, the minutes showed.

Many Fed officials suggested that the policy rate could be kept at a restrictive level in case the economy remained robust and inflation – elevated.

Several officials noted that it would be appropriate to lower the policy rate in case labor market conditions weakened, economic activity slowed, or inflation moved back to the 2% target faster than expected.

Meanwhile, the latest data out of Switzerland showed the country’s trade surplus had narrowed to CHF 4.03 billion in January from a revised up CHF 4.4 billion surplus in December.

The USD/CHF currency pair was last down 0.28% on the day to trade at 0.9018.