The USD/CHF pair weakened near 0.8810 during the early European session on Thursday (3/13). Concerns that US President Donald Trump's protectionism will push the US economy into recession dragged the US Dollar (USD) lower against the Swiss Franc (CHF). Investors will take more cues from the US Producer Price Index (PPI) for February and the weekly Initial Jobless Claims, due on Thursday.

US inflation, as measured by the Consumer Price Index (CPI), eased to 2.8% YoY in February from 3.0% in January, lower than the estimate of 2.9%, the Labor Statistics reported on Wednesday. Meanwhile, core CPI inflation, which excludes volatile food and energy categories, eased to 3.1% in February from 3.3% in the previous month. On a monthly basis, the US headline CPI rose 0.2% in February after a sharp 0.5% increase in January, lower than the 0.3% expected. The core CPI, which excludes volatile food and energy categories, rose 0.2% during the same reporting period from 0.4% previously.

With the economic outlook deteriorating due to tariffs, financial markets are expecting the US Federal Reserve (Fed) to resume interest rate cuts in June after pausing its easing cycle in January. This, in turn, could further weaken the greenback in the near term.

Also, rising demand for safe havens amid growing concerns over global economic conditions and geopolitical tensions in the Middle East could boost the Swiss Franc (CHF) and create a headwind for USD/CHF. A Houthi spokesman said late Tuesday that they would attack any Israeli ship that violates the group's ban on Israeli vessels passing through the Red and Arabian Seas, the Bab al-Mandab Strait, and the Gulf of Aden, effective immediately. (Newsmaker23)

Source: FXstreet