USD/CHF gains ground below 0.8000 ahead of US tariff deadline

• USD/CHF trades calmly around 0.7950, while investors seek clarity on US’ new tariff rates.

• So far, the US has signed trade pact with the UK, Vietnam and China.

• The SNB could push interest rates into a negative territory.

The USD/CHF pair trades broadly stable around 0.7950 during Asian trading hours on Monday. The Swiss Franc pair wobbles as investors await clarity on the additional import rates, which the United States (US) is prepared to impose on its trading partners that fails to strike a trade deal during the 90-day reciprocal tariff pause, ending July 9.

At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks up to near 97.15.

However, the outlook of the US Dollar remains uncertain as a significant number of US trading partners are expected to face the tariff heat. So far, Washington has announced bilateral agreements with the United Kingdom (UK) and Vietnam and a limited trade pact with China.

The imposition of reciprocal tariffs by the US on a large number of its trading partners will disrupt the global trade and will be inflationary for the US economy. A scenario that will increase demand for safe-haven assets, such as the Swiss Franc.

Meanwhile, the White House has signaled that it will announce trade deals with more nations soon and new tariff rates will be imposed on nations from August 1. It has also clarified that the August 1 is not the new deadline but a time period for trade partners to renegotiate tariff rates.

In the Swiss region, the Swiss National Bank (SNB) will likely keep the door open for negative interest rates despite price pressures growing at a faster pace in June. Year-on-year Consumer Price Index (CPI) rose at a faster pace of 0.1%, while economists anticipated a steady decline of 0.1%.