Friday's early European session sees the USD/CHF trading on a softer note at 0.9110.
The USD may rise in 2025 as a result of the Fed's anticipated reduction in rate cuts.
Geopolitical risks have the potential to increase safe-haven flows and limit the pair's upside.
During Friday's early European session, the USD/CHF pair breaks its four-day winning streak as it declines to around 0.9110. The demand for safe haven flows amid the ongoing Russia-Ukraine conflict and the Middle East's ongoing geopolitical tensions strengthens the Swiss franc (CHF) relative to the US dollar.
Three people with knowledge of the matter tell Axios that Joe Biden reportedly discussed plans to attack Iran's nuclear facilities on Thursday in case Tehran advanced toward developing a nuclear weapon before Donald Trump's inauguration on January 20. The developments surrounding the geopolitical risks will be closely watched by investors. Any indications of escalation could cause the CHF to rise and put pressure on the USD/CHF exchange rate.
In the meantime, the US central bank is expected to keep interest rates higher here for a longer period of time than other major central banks because inflation in the US is still stubbornly above the Fed's (Fed) 2% target. In contrast to its initial forecast of four rate cuts this year, the Fed has now only indicated two rate cuts. The USD may appreciate even more if the Fed is expected to reduce interest rates less this year.
The USD may rise in 2025 as a result of the Fed's anticipated reduction in rate cuts.
Geopolitical risks have the potential to increase safe-haven flows and limit the pair's upside.
During Friday's early European session, the USD/CHF pair breaks its four-day winning streak as it declines to around 0.9110. The demand for safe haven flows amid the ongoing Russia-Ukraine conflict and the Middle East's ongoing geopolitical tensions strengthens the Swiss franc (CHF) relative to the US dollar.
Three people with knowledge of the matter tell Axios that Joe Biden reportedly discussed plans to attack Iran's nuclear facilities on Thursday in case Tehran advanced toward developing a nuclear weapon before Donald Trump's inauguration on January 20. The developments surrounding the geopolitical risks will be closely watched by investors. Any indications of escalation could cause the CHF to rise and put pressure on the USD/CHF exchange rate.
In the meantime, the US central bank is expected to keep interest rates higher here for a longer period of time than other major central banks because inflation in the US is still stubbornly above the Fed's (Fed) 2% target. In contrast to its initial forecast of four rate cuts this year, the Fed has now only indicated two rate cuts. The USD may appreciate even more if the Fed is expected to reduce interest rates less this year.
