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• USD/CHF holds gains as the Swiss Franc faces challenges due to improving market mood.
• The Swiss Franc may attract buyers as the SNB is expected to postpone further monetary policy easing.
• The market sentiment improved following the news that the EU and the US are close to finalizing a deal.

USD/CHF edges higher for the second successive day, trading around 0.7940 during the European hours on Thursday. The pair appreciates as the Swiss Franc (CHF) struggles due to weakened safe-haven demand, driven by the optimism over further trade deals between the United States (US) and key partners. Investors are likely awaiting the S&P US Global Purchasing Managers Index (PMI) data for July later in the day.

The Swiss Franc (CHF) may regain ground as traders expect the Swiss National Bank (SNB) to delay further easing of monetary policy following the recent Swiss inflation report for June. The annual Swiss Consumer Price Index (CPI) inched up 0.1% in June, while the monthly CPI increased 0.2%.

The market sentiment improved following the news that the European Union (EU) and the United States (US) are closing in on a deal that would impose 15% tariffs on EU goods imported into the US, per the Financial Times. Additionally, US President Donald Trump announced on Tuesday a major tariff deal with Japan, which includes a 15% tariff on Japanese exports.

Additionally, the USD/CHF pair gains ground as the US Dollar (USD) possibly receives support from the easing concerns over the Federal Reserve’s (Fed) independence. US Treasury Secretary Scott Bessent noted late Thursday that a nominee for the next Federal Reserve Chair is likely to be announced in December or January. Bessent highlighted that there is “no rush” to choose a successor to current Fed Chair Jerome Powell. Traders will focus on next week’s Federal Open Market Committee meeting, where rates are expected to be kept on hold, with potential cuts anticipated in October.

However, the recent comments from US President Donald Trump at an AI summit in Washington on Thursday signaled a shift toward a more aggressive tariff strategy targeting nearly all US trading partners, with exceptions made only for a limited number of nations. Trump established a new baseline for tariffs ahead of the August 1 deadline by indicating that the upcoming tariffs are set to begin at a minimum rate of 15%. Trump also said that “We will have a straight, simple tariff of anywhere between 15% and 50%.”

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