USD/CHF extends its gains for the fourth straight session, trading near 0.8840 during Asian trading hours on Monday (3/24). The currency pair strengthened as the US Dollar (USD) recovered its daily losses, supported by rising Treasury yields amid the hawkish tone surrounding the Federal Reserve (Fed). Last week, Fed Chair Jerome Powell noted, "Labor market conditions are solid, and inflation has moved closer to our longer-run objective of 2%, although it remains somewhat elevated."

The US Dollar Index (DXY), which measures the USD against a basket of six major currencies, continued to rise, hovering around 104.10. Meanwhile, the yields on the 2-year and 10-year US Treasury bonds were at 3.97% and 4.28%, respectively.

However, the USD is facing some pressure amid concerns over a potential US economic slowdown, fueled by President Trump's trade policies. Investors now await the preliminary reading of the US S&P Global PMI data for March, due later in the North American session.

The Swiss franc (CHF) may come under downward pressure as improving risk sentiment dampens demand for safe-haven assets. The shift follows reports that the White House is adjusting its tariff strategy ahead of the April 2 implementation, according to the Wall Street Journal. Additionally, geopolitical tensions have eased, with Ukrainian and US officials meeting in Riyadh on Sunday to discuss peace efforts, while President Trump continues to advocate an end to the three-year war.

The Swiss National Bank (SNB) cut its key policy rate to 0.25% on Thursday, the lowest level since September 2022. Although the move was widely anticipated, the SNB refrained from committing to a specific policy path. Policymakers stressed that lower borrowing costs are needed to align monetary conditions with subdued inflation pressures. (Newsmaker23)

Source: FXstreet