The USD/CHF pair trades on a softer note around 0.9040 during the early European trading hours on Tuesday. The US Dollar (USD) weakens due to confusion about President-elect Donald Trump’s tariff plans. Investors will monitor how aggressive Trump's policies could be when he takes office. Later on Tuesday, the preliminary reading of the Eurozone Harmonized Index of Consumer Prices (HICP) for December will be released. 

Washington Post reported on Monday that Trump is considering a tariff plan that will narrow the focus to a select set of goods and services. However, Trump denied the report in a post on Trust Social, saying “That is wrong. Investors sentiment turn cautious ahead of this week's release of the Federal Open Market Committee (FOMC) minutes and the US Nonfarm Payrolls (NFP) report on Wednesday and Friday, respectively. This, in turn, drags the Greenback lower against the Swiss Franc (CHF). 

Additionally, the persistent geopolitical tensions in the Middle East and the ongoing Russia-Ukraine war could boost the CHF, a safe-haven currency, and create a headwind for the pair. The local news agency, Aljazeera, reported that Israel's continuous bombing of Gaza continues, with six persons killed, including a child, killed in its latest attacks on residential buildings, bringing the total number of deaths on Monday to at least 28.

However, the cautious stance of the US Federal Reserve (Fed) officials could help limit the USD’s losses. Fed Governor Lisa Cook said on Monday that Fed policymakers could be more cautious with further rate cuts, citing labor market resilience and stickier inflation. Several Fed policymakers are scheduled to speak later this week. Any hawkish comments from Fed officials could lift the Greenback against its rivals in the near term. 

More By This Author: