- USD/CHF loses ground as the Swiss Franc appreciates due to safe-haven demand amid rising tariff war fears.
- Canada’s Prime Minister’s Office announced plans to impose retaliatory 25% tariffs on US imports if US tariffs take effect.
- The US Dollar faced challenges due to optimism surrounding a potential Ukraine peace deal.
USD/CHF remains under pressure for the second consecutive day, hovering around 0.8960 during Tuesday’s Asian session. The pair may decline further as the safe-haven Swiss Franc (CHF) strengthens amid escalating risk-off sentiment driven by growing concerns over a global tariff war.
On Monday, the White House confirmed that President Trump signed an order raising tariffs on Chinese imports to 20%, while similar measures for Mexico and Canada are still pending. Trump also reiterated that reciprocal tariffs will take effect on April 2 for countries imposing duties on US goods.
In response, Canada’s Prime Minister’s Office stated that Canada will implement 25% retaliatory tariffs on US imports starting Tuesday if US tariffs proceed. Meanwhile, China’s Commerce Ministry announced early Tuesday that it would take “necessary countermeasures” to protect its legitimate rights and interests.
The US Dollar Index (DXY), which tracks the USD against six major currencies, has climbed to near 106.60. However, the Greenback faces downward pressure as optimism surrounding a potential Ukraine peace deal reduces demand for safe-haven assets. European leaders have voiced support for security guarantees for Ukraine, further boosting global risk sentiment.
US ISM Manufacturing PMI dipped to 50.3, falling short of expectations (50.5) and declining from January’s 50.9. Conversely, S&P Global’s final Manufacturing PMI for February exceeded forecasts at 52.7, improving from its preliminary estimate.
Investors now shift their focus to upcoming US labor market data, with the ADP employment report due on Wednesday and the Nonfarm Payrolls report on Friday, which could provide further insights into the Federal Reserve’s (Fed) interest rate outlook.
