USD/CHF extends its gains for the third successive day, trading around 0.7880 during the Asian hours on Wednesday. The pair gains ground as the US Dollar (USD) remains firm, driven by stalled US-Iran peace negotiations and renewed tensions in the Middle East, continued to underpin safe-haven demand.
US Central Command (CENTCOM) announced Tuesday that it successfully defeated a series of Iranian missile and drone strikes targeting Kuwait and Bahrain. In response to the regional aggression, US forces also executed self-defense strikes against military targets on Iran’s Qeshm Island, per ABC News.
The Strait of Hormuz closure threatens to drive energy prices higher and intensify global inflationary pressures, reinforcing expectations that the Federal Reserve (Fed) will maintain elevated interest rates for an extended period.
Following a revised, more-than-two-year low of CHF 2.6 billion in March, Switzerland's Trade Surplus rebounded to CHF 3.2 billion in April. This expansion was driven by a 3.0% month-over-month decline in imports (falling to CHF 19.0 billion), while exports ticked up 0.1% to reach a three-month high of CHF 22.3 billion.
Swiss National Bank (SNB) Chairman Martin Schlegel stated on Tuesday that the real overvaluation of the Swiss Franc (CHF) is significantly lower than its nominal overvaluation. Schlegel added that the central bank has heightened its readiness to intervene in the foreign exchange market to counter overvaluation pressures stemming from the escalating conflict in the Middle East.
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