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• USD/CHF rises as trade optimism improves due to recent trade developments.
• Traders expect the US-China to extend trade truce by three months ahead of an August 12 deadline.
• The CHF may regain its ground as the Swiss National Bank may delay further monetary policy easing.

USD/CHF extends its gains for the second successive session, trading around 0.8060 during the European hours on Tuesday. The pair appreciates as the US Dollar (USD) receives support from trade optimism, driven by the recent trade developments between the United States (US) and its trading partners.

The United States and European Union (EU) reached a trade agreement finalized on Sunday, setting 15% tariffs on most European goods, taking effect on August 1. Additionally, market sentiment improves on expectations of the US-China to extend a fragile trade truce by three months ahead of an August 12 deadline. US President Donald Trump also announced in a social media post Monday to resume trade negotiations with Cambodia and Thailand after both countries ended a five-day fight along their disputed border.

The US Dollar also possibly gains ground as the US Federal Reserve (Fed) is widely expected to keep the benchmark interest rate steady between 4.25% and 4.50% on Wednesday. The Federal Open Market Committee (FOMC) press conference will be observed for any signs that rate cuts may start in September. Market participants will likely observe the upcoming data this week, including the Q2 Personal Consumption Expenditures (PCE) inflation report and July’s Nonfarm Payrolls, for further insight into the health of the US economy.

The USD/CHF pair receives support as the safe-haven Swiss Franc (CHF) struggles due to the market optimism over trade deals between the United States (US) and key partners. However, the downside of the CHF could be restrained as traders expect the Swiss National Bank (SNB) to delay further easing of monetary policy following the recent Swiss inflation report for June.

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