USD/CHF remains under pressure for the fourth consecutive session, hovering around 0.8970 during Asian trading hours on Tuesday. The pair's decline is driven by a weaker US Dollar (USD), weighed down by disappointing US economic data, including last week's Jobless Claims and the S&P Global Purchasing Managers' Index (PMI).

Traders continued evaluating the interest rate outlook, with the Federal Reserve (Fed) expected to maintain its current stance for an extended period, amid ongoing uncertainty about President Trump's economic policies.USD/CHF remains under pressure for the fourth consecutive session, hovering around 0.8970 during Asian trading hours on Tuesday. The pair's decline is driven by a weaker US Dollar (USD), weighed down by disappointing US economic data, including last week's Jobless Claims and the S&P Global Purchasing Managers' Index (PMI).

Traders continued evaluating the interest rate outlook, with the Federal Reserve (Fed) expected to maintain its current stance for an extended period, amid ongoing uncertainty about President Trump's economic policies.
Adding to market uncertainty, Federal Reserve Bank of Chicago President Austan Goolsbee stated on Monday that the US central bank requires more clarity before considering interest rate cuts. Goolsbee noted that if government policies lead to rising prices, the Fed is legally obligated to address them.

The US Dollar Index (DXY), which tracks the USD against six major currencies, has slipped to around 106.50, while yields on US Treasury bonds have also declined — with the 2-year yield falling to 4.14% and the 10-year yield to 4.37% at the time of writing.

Meanwhile, the Swiss Franc (CHF) found support as the yield on the 10-year Swiss government bond climbed amid anticipation around the outcome of the German federal election last week. Friedrich Merz, leader of the Christian Democratic Union of Germany (CDU), is poised to become the next German Chancellor after securing a majority of votes. However, Merz is expected to face significant challenges, including complex coalition negotiations.

On the domestic front, softer Swiss Consumer Price Index (CPI) data for January has heightened expectations of further easing by the Swiss National Bank (SNB) in March. Inflation has dropped to 0.4%, its lowest level in nearly four years. In December, the SNB cut interest rates by 50 basis points and signaled the possibility of additional rate cuts ahead.

Source: Fxstreet