Geopolitical tensions lift the Dollar while softer US inflation data reduces expectations for a July Fed hike.
The USD/CHF pair traded around 0.8090 in Asian hours Friday, stabilizing after modest gains as Middle East tensions countered shifting Fed policy expectations. Escalating US-Iran hostilities, including threats to disrupt Red Sea oil routes, supported the Dollar despite softer US inflation data this week.
US consumer inflation rose less than expected in June, while producer prices unexpectedly declined. Initial jobless claims also fell to a two-month low, prompting markets to price out a July Fed rate hike. Traders remain divided on a potential September move, though expectations have softened.
Rising oil prices amid renewed Middle East tensions could bolster the Swiss Franc, complicating the pair’s outlook. Markets are reassessing global growth and inflation risks, with the Swiss National Bank’s policy stance also in focus.