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• USD/CHF may appreciate further due to a stronger US Dollar amid higher Treasury yields.
• The US Dollar also receives support from the market caution ahead of the US presidential election.
• The safe-haven demand for the Swiss Franc is undermined due to easing all-out war fear in the Middle East.

USD/CHF remains subdued following the losses from the previous session, hovering around 0.8650 during Asian trading hours on Tuesday. This downside of the pair could be limited due to solid US Dollar (USD) amid higher Treasury yields.

The US Dollar gains support due to market caution ahead of the upcoming US election in November. Market sentiment increasingly favors Former President Donald Trump. According to polling site FiveThirtyEight, Trump's possibility of winning the US election has increased to 52% compared to 48% for Vice President Kamala Harris.

The US Dollar Index (DXY), which measures the value of the US Dollar against its six major currencies, trades around 104.30 with 2-year and 10-year yields on US Treasury bonds standing at 4.12% and 4.27%, respectively, at the time of writing.

The Swiss Franc (CHF) faced challenges due to rising expectations for another interest rate cut by the Swiss National Bank (SNB) at its upcoming December meeting. Traders are likely to monitor the Consumer Price Index (CPI) for October, which is scheduled for release later this week.

Moreover, the demand for the Swiss Franc as a safe haven may decline as concerns over a potential all-out war in the Middle East have eased with the reduction in military operations. However, according to Reuters, Iran’s Foreign Ministry spokesperson, Esmaeil Baghaei, has suggested the possibility of employing "all available tools" to respond to Israel’s recent attacks on military targets within Iran.

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