USD/CHF weakens below 0.8850 amid geopolitical tensions

• USD/CHF loses traction to near 0.8830 in Tuesday’s early European session.
• Trump said he may give some countries breaks on reciprocal tariffs.
• Middle East geopolitical tensions could boost the safe-haven flows, supporting the CHF. 

The USD/CHF pair weakens to around 0.8830 during the Asian trading hours on Tuesday, pressured by a decline in the US Dollar (USD). Traders will keep an eye on the US Conference Board’s Consumer Confidence gauge, New Home Sales and the Richmond Fed Manufacturing Index, which will be released later on Tuesday. 

Data released by the S&P Global on Monday showed that the US Composite PMI rose to 53.5 (preliminary) in March from 51.6 in February. Meanwhile, the Manufacturing PMI dropped to 49.8 in March versus 52.7 prior, missing the estimation of 51.9. The Services PMI improved to 54.3 in March from 51.0 in February, above the market consensus of 51.2.  The mixed US PMI reports have failed to boost the Greenback. 

President Donald Trump said not all of his threatened levies would be imposed on April 2. Trump signaled that some trading partners would receive possible exemptions or reductions. The uncertainty surrounding the Trump tariff policies could weigh on the Greenback against the Swiss Franc (CHF). 

Meanwhile, the rising geopolitical tensions in the Middle East could boost the safe-haven flows, benefiting the CHF. Israel continues to carry out airstrikes in Gaza, ending a nearly two-month ceasefire with Hamas. Israeli Prime Minister Benjamin Netanyahu vowed to act “with increasing military strength” to free hostages and disarm Hamas.