Geopolitical tensions in the Middle East and rising US Treasury yields drive demand for the USD, pressuring the Swiss Franc.
The USD/CHF pair climbed to 0.8130 in Asian trading, extending gains for a second day as the US Dollar strengthened on safe-haven flows. Escalating Middle East tensions, including potential disruptions in the Strait of Hormuz and Saudi Arabia’s military plans, fueled risk aversion.
US Treasury yields rose alongside crude oil prices, reigniting concerns over another Federal Reserve rate hike. The CME FedWatch Tool shows a 54.5% chance of a 25-basis-point increase in September, down from 63.4% last week. Investors await July’s Nonfarm Payrolls report for further Fed policy clues.
Switzerland’s economic data remains mixed, offering little support to the CHF. The currency pair’s movement reflects broader market uncertainty amid geopolitical and monetary policy risks.