USD/CHF attracts some buyers to near 0.7975 in Wednesday’s early European session.
Trump said a 50% tariff on copper imports is coming and threatened levies on pharmaceuticals.
The release of the FOMC Minutes will take center stage later on Wednesday.
The USD/CHF pair gathers strength around 0.7975 during the early European session on Wednesday, bolstered by a firmer US Dollar (USD). However, the concerns about renewed trade tensions triggered by US President Donald Trump might cap the upside for the pair. All eyes will be on the FOMC Minutes, which will be published later on Wednesday.
Trump said late Tuesday that he would offer no additional extension on the country-specific tariffs, despite the previous day allowing that he was “not 100% firm” on his August 1 deadline. Furthermore, Trump indicated that he could announce substantial new rates on imports of copper and pharmaceuticals.
The lingering threat to inflation from tariffs might convince the US Fed to hold off on cutting interest rates until next year, which underpins the Greenback against the Swiss Franc (CHF). The markets are now anticipating 50 basis points (bps) worth of Fed rate reductions by the end of this year, starting in October.
The conflict in Gaza continues, with dozens of Palestinians killed as Israel unleashes further deadly attacks. Meanwhile, Israeli Prime Minister Benjamin Netanyahu is visiting Washington and has met with Trump at the White House. There is speculation that progress could be made toward a ceasefire. Nonetheless, any signs of escalating geopolitical tensions in the region could boost the safe-haven flows, supporting the CHF.
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