USD/CHF consolidates losses below 0.8130 in risk-on markets with Fed's Powell in the spotlight

• The US Dollar accelerated its reversal from last week's highs to levels near 0.8100 after the Iran-Israel ceasefire.

• Dovish comments from Fed officials Bopwman and Waller have added pressure on the USD.

• Fed Chair Powell is expected to speak to Congress later today and give more clues on the bank's next steps.

The Swiss Franc has retraced most of the last two weeks’ losses, and the USD/CHF has returned to levels right above 0.8100, with the Dollar weighed by the risk-on mood after the announcement of a truce in the Middle East, and dovish rhetoric by Fed officials.

Trump boosted investors’ sentiment late on Monday, downplaying Iran’s attack on a US military base in Qatar and announcing a “complete and total” ceasefire. The ensuing risk rally has hit the US Dollar harder than the CHF, another safe haven, which is also struggling today.

Also on Monday, Federal Reserve Vice Chair of Supervision, Michelle Bowman, joined her colleague Waller and called for a rate cut in the coming months. Bowman affirmed that the impact of Trump’s tariffs on inflation is likely to be smaller than previously thought, and that the bank should ease its monetary policy to support job creation.

These comments have boosted the interest in Chairman Powell’s testimony to Congress. Investors will be looking for signs of cracks in his recent hawkish rhetoric, which would boost hopes of a rate cut, probably more in September than in July, and increase pressure on the US Dollar.